Recent wastewater analyses performed in care homes for the elderly showed high levels of water pollution resulting from pharmaceutical waste. The way people perceive the environmental risk of pharmaceuticals can contribute to reversing this problem, but the factors that influence risk perception remain relatively unknown. The aims of the study are two‐fold. We first focused on exploring the levels of knowledge regarding environment/water pollution due to pharmaceutical residues from the groups responsible for prescribing (health professionals), handling (staff), and consuming pharmaceuticals (residents) in care homes for the elderly. Second, we assessed the environmental risk perception of pharmaceuticals based on two main factors: prescription medication (nonprescribed versus prescribed) and disease severity (milder versus severe disease), accounting for their level of knowledge (deficit versus sufficiency of knowledge). The study was designed based on correlational research. Data were collected in homes for the elderly located in three Southwestern European countries (N = 300), using self‐report surveys. Current knowledge was perceived to be low and the need to know more was perceived to be high, across all groups. As hypothesized, results indicated that to assess the environmental risk, participants made use of information that was unrelated to pharmaceutical persistence, bioaccumulation, and toxicity (PBT). Prescribed pharmaceuticals and/or medication used to treat severe diseases were perceived as being more hazardous for the environment. Simple main effects analysis comparing between knowledge levels confirmed that this effect occurred mostly when participants had knowledge deficit for disease severity but not for prescription medication. These misconceptions might discourage taking an active role in reducing the impact of pharmaceutical residues in the environment.