A disguised-patient technique was used to study the nature and frequency of dispensing errors and quality of patient medication counseling in 100 randomly selected community pharmacies. Analysis of 100 prescription orders dispensed detected 24 dispensing errors, of which 4 were clinically significant. Oral counseling was provided to 64 of the patients, covering an average of 3 of the 14 categories of drug information that the Omnibus Budget Reconciliation Act of 1990 (OBRA '90) requires pharmacists to consider when counseling Medicaid patients. In addition to prescriber's label instructions, pharmacists provided written counseling information, including auxiliary labels and receipts, to 98% of the patients, but it covered only an average of six OBRA '90 categories. The results suggest that problems with the quality of community pharmacy medication counseling and dispensing accuracy require immediate attention.