Extemporaneously compounded products are designed for an individual patient based on a licensed physician’s prescription in response to an identified need. Compounding provides medications for unique medical needs for which commercially manufactured products are unavailable. Compounding practice includes activities such as formulating, mixing, or repacking products. Extemporaneous preparations are not licensed by Drug Regulatory Authorities and hence, are not evaluated for quality, efficacy, and stability. Also, adverse event reporting is not mandatory for these products. The need for extemporaneous preparations is precipitated by a lack of commercially available products for all the medicines and dosage forms that are required by patients. Products intended for topical and pediatric use are the majority. Extemporaneous preparations are generally considered as high-risk products. Common risks of compounded products include calculation errors, microbial contamination, therapeutic failure, and adverse reactions. To reduce the risks, Drug Regulatory Authorities havedeveloped guidelines that describe the minimum standards to be followed when preparing for extemporaneous compounding to ensure product quality and fitness. A comprehensive assessment is performed to justify the need for these products. The preparation process should comply with all the Good Manufacturing Practices including design of compounding areas. Pharmacists performing compounding activities require appropriate knowledge, skills, and competence to undertake the task. The ingredients used in compounding are subject to pharmacopeial quality standards and should be sourced from approved vendors. The final compounded product in some countries is controlled as stipulated in the components standard. Extemporaneous compounding remains an important part of pharmacy practice. Comprehensive risk assessment, adherence to the prescribed manufacturing practices, and use of national formularies are necessary for quality assurance of these preparations.