Background: Monitoring and detecting adverse drug reactions (ADRs) in hospitals is crucial to improving drug safety and healthcare delivery quality. Nevertheless, there was not enough information on ADR incidence and its figure in Iran. Aim: this study aimed to determine the incidence of ADRs in hospitalized patients and investigate their characteristics in Iran.Methods: We conducted a three-month prospective study in two tertiary hospitals in 2019. All admitted patients were intensively monitored for all suspected ADRs through daily visiting hospital wards and soliciting information from physicians, nurses and interviewing suspicious patients. We calculated the incidence of ADRs, and 95% confidence intervals (95% CI). Poisson regression was used to evaluate risk factors for ADR incidence. Results: Among 13,613 admitted patients, we detected 115 ADRs in 114 patients. The incidence of ADR was 8.4 per 1000 admissions (95% CI: 7.0-10.1), and 13.9% of them were ADR-related hospital admissions. The risk of ADRs was significantly predicted by age, length of hospital stay, patients’ diagnostics, number of drug usage, and using respiratory system agents and anti-infectives for systemic use. The most common ADRs were skin and subcutaneous manifestations (52.2%), and 62.6% of ADRs were caused by anti-infectives (commonly vancomycin, ceftriaxone, and ciprofloxacin). Conclusion: This study indicated that ADRs occurrence during the hospital stay or resulting in hospital admissions are considerable. Given that ADR occurrence could be associated with increased morbidity, mortality, and economic burden, constant intensive monitoring is required to address the drug safety issue and promote actions to improve patient safety and reduce the health and economic burden.