The utilization of therapeutic drug monitoring (TDM) for serum digoxin and theophylline was assessed with respect to the indication, time of sample collection and contribution to patient care. A total of 585 serum drug level determinations of digoxin (275) and theophylline (328) were done in a four month period. Reasons for requests were subtherapeutic response (27.5%), suspected toxicity (3.8%), baseline data (26.7%), patients at risk for toxicity (7.7%), and for the remaining 34.4% of orders, no reason was stated. The highest number of requests 246 (42.1%) were from the inpatient ward (INP), followed by emergency room (ER) 32.6%, outpatient department (OPD) 13% and intensive care unit (ICU) 12.3%. Repeated assays accounted for 363 determinations of which 55.9% had levels similar to the previous ones. In this study, we found a high incidence of inappropriateness in patient selection (34.4%), time of serum sample collection (28.4%), and dosage adjustment (46.8%). However, when these audit criteria were analyzed together, the overall appropriateness was as low as 33.5%. This indicated that serum drug monitoring was poorly utilized and did not contribute much to the patient's care. This results in an estimated financial loss per year (for inappropriate use of digoxin and theophylline levels) of about 37,344 Saudi Riyals (US $9,956.00). Corrective educational programs for the staff, based on standard guidelines for TDM, have been initiated and this study is a baseline for future prospective audits.