Objective: To determine the prevalence, clinical significance and the associated risk factors of potential drug-drug interactions (DDIs) at internal medicine ward of University of Gondar (UOG) hospital. Method: A prospective cross-sectional study was conducted on patients treated in internal medicine ward of UOG hospital from April 29, 2013 to June 2, 2013. Data was collected from medical records and by interviewing the patients face to face. Descriptive analysis was conducted for back ground characteristics and logistic regression was used to determine the associated risk factors. Result: In our study, we have identified a total number of 413 potential DDIs and 184 types of interacting combinations with 4.13 potential DDIs per patient. Among 413 potential DDIs most were of moderate interactions 61.2 (n=253) followed by 26 (n=107) of minor interactions and 12.8 (n=53) of major interactions. There was significant association of occurrence of potential DDIs only with taking three or more medications. Conclusion: We have recorded a high rate of prevalence of potential DDI in the internal medicine ward of UOG hospital and a high number of clinically significant DDIs which the most prevalent DDI were of moderate severity. Careful selection of drugs and active pharmaceutical care is encouraged in order to avoid negative consequences of these interactions.