Hospital discharge summaries offer a potentially rich resource to enhance pharmacovigilance efforts to evaluate drug safety in real-world clinical practice. However, it is infeasible for experts to read through all discharge summaries to find cases of drug-adverse event (AE) relations.The objective of this paper is to develop a natural language processing (NLP) framework to detect drug-AE relations from unstructured hospital discharge summaries.An NLP algorithm was designed using customized dictionaries of drugs, adverse event (AE) terms, and rules based on trigger phrases, negations, fuzzy logic and word distances to recognize drug, AE terms and to detect drug-AE relations. Furthermore, a customized annotation tool was developed to facilitate expert review of discharge summaries from a tertiary hospital in Singapore in 2011.A total of 33 trial sets with 50 to 100 records per set were evaluated (1620 discharge summaries) by our algorithm and reviewed by pharmacovigilance experts. After every 6 trial sets, drug and AE dictionaries were updated, and rules were modified to improve the system. Excellent performance was achieved for drug and AE entity recognition with over 92% precision and recall. On the final 6 sets of discharge summaries (600 records), our algorithm achieved 75% precision and 59% recall for identification of valid drug-AE relations.Adverse drug reactions are a significant contributor to health care costs and utilization. Our algorithm is not restricted to particular drugs, drug classes or specific medical specialties, which is an important attribute for a national regulatory authority to carry out comprehensive safety monitoring of drug products. Drug and AE dictionaries may be updated periodically to ensure that the tool remains relevant for performing surveillance activities. The development of the algorithm, and the ease of reviewing and correcting the results of the algorithm as part of an iterative machine learning process, is an important step towards use of hospital discharge summaries for an active pharmacovigilance program.