The aim of this study was to assess the extent of poly-pharmacy, occurrence, and associated factors for the occurrence of drug–drug interaction (DDI) and potential adverse drug reaction (ADR) in Gondar University Teaching Referral Hospital. Institutional-based retrospective cross-sectional study. This study was conducted on prescriptions of both in and out-patients for a period of 3 months at Gondar University Hospital. Both bivariate analysis and multivariate logistic regression were used to identify risk factors for the occurrence of DDI and possible ADRs. All the statistical calculations were performed using SPSS® software. A total of 12,334 prescriptions were dispensed during the study period of which, 2,180 prescriptions were containing two or more drugs per prescription. A total of 21,210 drugs were prescribed and the average number of drugs per prescription was 1.72. Occurrences of DDI of all categories (Major, Moderate, and Minor) were analyzed and DDI were detected in 711 (32.6%) prescriptions. Sex was not found to be a risk factor for the occurrence of DDI and ADR, while age and number of medications per prescription were found to be significant risk factors for the occurrence of DDI and ADR. The mean number of drugs per prescription was 1.72 and hence with regard to the WHO limit of drugs per prescription, Gondar hospital was able to maintain the limit and prescriptions containing multiple drugs supposed to be taken systemically. Numbers of drugs per prescription as well as older age were found to be predisposing factors for the occurrence of DDI and potential ADRs while sex was not a risk factor.