Aims We prospectively studied the efficacy, incidence of adverse drug reactions and withdrawal from leflunomide in an outpatient population with rheumatoid arthritis in a setting of care‐as‐usual.Methods In this prospective case series study, a standard dataset was collected from outpatient medical records, including patient and disease characteristics, data on leflunomide use and adverse drug reactions.Results During the study period 136 rheumatoid arthritis patients started leflunomide. Median (range) follow‐up duration was 317 (11–911) days. Sixty‐five percent of patients experienced at least one adverse drug reaction related to leflunomide. During follow‐up 76 patients (56%) withdrew from leflunomide treatment, mainly because of adverse drug reactions (29%) or lack of efficacy (13%). The overall incidence density for withdrawal from leflunomide was 56.2 per 100 patient years. Complete data for calculating efficacy using a validated disease activity score on 28 joints (DAS28) was available for 48, 36, and 35% of patients at 2, 6, and 12 months follow‐up, respectively. Within a 12‐month period after start of leflunomide treatment 76% of the evaluable patients were classified as moderate or good responders according to the DAS28 response criteria.Conclusions In the setting of care‐as‐usual rheumatoid arthritis patients starting leflunomide frequently experienced adverse drug reactions. More than half of the patients withdrew from leflunomide treatment within 1 year of starting leflunomide treatment, mainly because of adverse drug reactions.