The development and operation of a prototype inpatient drug distribution system that uses bar codes is described, and the impact of bar coding on the cassette-filling and verification process is summarized. A prototype pharmacy dispensing site was created to function in parallel with an existing satellite dispensing site that served 78 general medical-care beds. Supplemental labels encoded with an 11-digit unique product identification number, a 5-digit expiration date, and a 6-character lot number were generated and affixed to all unit dose packages dispensed from the prototype pharmacy site. The unit doses were labeled with Code 49 symbology; each label measured 0.8 x 1.25 inches. Each patient cassette was labeled using Code 39 symbology. A cost-benefit model was developed, and the two dispensing systems were compared with respect to (1) time to fill patient cassettes, (2) time to verify patient cassettes, (3) time to process patient charges and credits, (4) time to correct dispensing errors, (5) accuracy of the cassette-filling process, and (6) accuracy of the cassette verification process. Bar-code dispensing and verification saved 1.52 seconds per dose. Additionally, the cassette verification function was shifted from pharmacists to technicians. Estimated per-dose cost of the bar-code system was 2.73 cents. A measurable improvement in the accuracy of filling patient cassettes was documented. The feasibility of using bar codes in unit dose dispensing was demonstrated, and the prototype system was shown to produce cost efficiencies and patient-care benefits.