ABSTRACT: Context: Medication safety is clearly an important quality issue for rural hospitals. However, rural hospitals face special challenges implementing medication safety practices in terms of their staffing and financial and technical resources. Purpose: This study assessed the capacity of small rural hospitals to implement medication safety practices, with particular focus on pharmacist staffing and the availability of technology. Methods: A telephone survey of a national random sample of small rural hospitals was conducted from March to May 2005 (N = 387 hospitals, 94.6% response rate). Survey respondents included pharmacists (89%) and directors of nursing (11%). Multivariate analyses examined the relationships between hospital organizational and financial variables and (1) the amount of pharmacist staffing; (2) use of pharmacy computers for medication safety activities; and (3) implementation of medication safety practices. Findings: Many small rural hospitals have limited hours of on-site pharmacist coverage. Almost one quarter of hospitals either do not have a pharmacy computer or are not using it for clinical purposes. Half of the hospitals have implemented 4 key medication safety practices. Level of pharmacist staffing, use of technology, and implementation of medication safety practices are significantly related to hospital financial status and accreditation. Conclusions: Implementation of protocols related to medication use and key medication safety practices are areas where small rural hospitals could improve. The study results support a continuation of Medicare cost-based reimbursement policies to help ensure financial stability and support quality and patient safety activities in small rural hospitals.