Pharmacoepidemiology is a rapidly growing discipline that is useful in studies on effects and adverse effects of drugs. During past years and decades databases have been built in Iceland that are becoming powerful tools for this kind of research. The databases are, however only useful for pharmacoepidemiological research if they include personal identification and can be merged. The personal identification should be without time limits because in many cases we are interested in what happened years or decades ago. The prescriptions database was started in 2002 and has dramatically changed the possibilities for pharmacoepidemiological studies in Iceland. The main aim of this review is to give an overview of the existing databases in Iceland and to encourage research in this important field.