Reactive impurities in pharmaceutical excipients could cause drug product instability, leading to decreased product performance, loss in potency, and/or formation of potentially toxic degradants. The levels of reactive impurities in excipients may vary between lots and vendors. Screening of excipients for these impurities and a thorough understanding of their potential interaction with drug candidates during early formulation development ensure robust drug product development. In this review paper, excipient impurities are categorized into six major classes, including reducing sugars, aldehydes, peroxides, metals, nitrate/nitrite, and organic acids. The sources of generation, the analytical method for detection, the stability of impurities upon storage and processing, and the potential reactions with drug candidates of these impurities are reviewed. Specific examples of drug-excipient impurity interaction from internal research and literature are provided. Mitigation strategies and corrective measures are also discussed.