Background: Interruptions have been implicated as a cause of clinical errors, yet, to our knowledge, no empirical studies of this relationship exist. We tested the hypothesis that interruptions during medication administration increase errors. Methods: We performed an observational study of nurses preparing and administering medications in 6 wards at 2 major teaching hospitals in Sydney, Australia. Procedural failures and interruptions were recorded during direct observation. Clinical errors were identified by comparing observational data with patients' medication charts. A volunteer sample of 98 nurses (representing a participation rate of 82%) were observed preparing and administering 4271 medications to 720 patients over 505 hours from September 2006 through March 2008. Associations between procedural failures (10 indicators; eg, aseptic technique) and clinical errors (12 indicators; eg, wrong dose) and interruptions, and between interruptions and potential severity of failures and errors, were the main outcome measures. Results: Each interruption was associated with a 12.1% increase in procedural failures and a 12.7% increase in clinical errors. The association between interruptions and clinical errors was independent of hospital and nurse characteristics. Interruptions occurred in 53.1% of administrations (95% confidence interval [CI], 51.6%-54.6%). Of total drug administrations, 74.4% (n = 3177) had at least 1 procedural failure (95% CI, 73.1%-75.7%). Administrations with no interruptions (n = 2005) had a procedural failure rate of 69.6% (n = 1395; 95% CI, 67.6%-71.6%), which increased to 84.6% (n = 148; 95% CI, 79.2%-89.9%) with 3 interruptions. Overall, 25.0% (n = 1067; 95% CI, 23.7%-26.3%) of administrations had at least 1 clinical error. Those with no interruptions had a rate of 25.3% (n = 507; 95% CI, 23.4%-27.2%), whereas those with 3 interruptions had a rate of 38.9% (n = 68; 95% CI, 31.6%-46.1%). Nurse experience provided no protection against making a clinical error and was associated with higher procedural failure rates. Error severity increased with interruption frequency. Without interruption, the estimated risk of a major error was 2.3%; with 4 interruptions this risk doubled to 4.7% (95% CI, 2.9%-7.4%; P < .001). Conclusion: Among nurses at 2 hospitals, the occurrence and frequency of interruptions were significantly associated with the incidence of procedural failures and clinical errors.