The aim of this study was to determine the frequency of drug dispensing errors in a traditional ward stock system operated by nurses and to investigate the effect of potential contributing factors. This was a descriptive study conducted in a teaching hospital from January 2005 to June 2007. In five wards, samples of dispensed solid drugs were collected prospectively and compared with the prescriptions. Data were evaluated using multivariable logistic regression. Overall, 2173 samples were collected, 95.5% of which were correctly dispensed (95% CI 94.5-96.2). In total, 124 errors in 6715 opportunities for error were identified; error rate of 1.85 errors per 100 opportunities for error (95% CI 1.54-2.20). Omission of a dose was the predominant type of error while vitamins and minerals, drugs for acid-related diseases and antipsychotic drugs were the drugs most frequently affected by errors. Multivariable analysis showed that surgical and psychiatric settings were more susceptible to involvement in dispensing errors and that polypharmacy was a risk factor. In this ward stock system, dispensing errors are relatively common, they depend on speciality and are associated with polypharmacy. These results indicate that strategies to reduce dispensing errors should address polypharmacy and focus on high-risk units. This should, however, be substantiated by a future trial.