Study Objectives Data evaluating cefepime thresholds associated with neurotoxicity remain limited. The objectives of this study were to evaluate the incidence of cefepime‐related neurotoxicity (CRN) in patients with plasma cefepime concentrations, assess the relationship between cefepime exposure and CRN, investigate clinical factors associated with CRN, and describe electroencephalogram (EEG) abnormalities in CRN. Design This was a retrospective study of adult inpatients admitted between 2016 and 2018 who received cefepime therapeutic drug monitoring (TDM). Potential CRN cases were identified utilizing a standard definition. The primary outcomes of the study were to determine the incidence of CRN and evaluate the relationship between cefepime trough concentrations, the average daily AUC, and neurotoxicity. Bayesian posteriors were generated for each patient using a cefepime pharmacokinetic (PK) model, and the mean daily area under the concentration–time curve (AUC) was calculated. Multiple regression was performed to assess the association between CRN, cefepime PK, and clinical predictors of neurotoxicity. Main Results Four hundred eighty‐one patients with 503 hospital encounters received cefepime TDM and were included in the analysis. The incidence of CRN was 4.4% (22/503). Patients with CRN had a higher incidence of renal dysfunction, hypertension, and diabetes mellitus compared to patients without CRN (non‐NT). The mean cefepime trough concentration was significantly greater in the CRN patients than in the non‐NT group (61.8 ± 33.7 vs. 30 ± 27.7 mg/L, respectively, p = 0.0002). Cefepime trough concentration and renal dysfunction were independently associated with increased risk of CRN in the adjusted multiple regression model. Moderate generalized slowing of the background rhythm was the most common EEG pattern associated with CRN. Delaying cefepime TDM greater than 72 h after the initiation of cefepime was associated with a 3‐fold increased risk of CRN. Conclusion Cefepime should be used cautiously in hospitalized patients with renal dysfunction due to the risk of neurotoxicity. Dose optimization utilizing TDM early in cefepime treatment may minimize adverse effects and improve patient safety.