This project evaluated the management and patient perception of Drug Revolving Funds (DRF) scheme in the pharmacy unit of a university teaching hospital. This DRF scheme was based on the principles and objectives of the Essential Drugs Programme. In conducting the evaluation, four aspects of the activities of the shop were investigated: the pattern of drug use, the pharmacy unit workload, the level of patient satisfaction with the services provided, and the extent to which the operational objectives of the DRF Scheme were achieved. The study utilised the basic ingredients of formative evaluation. Drugs were available on demand and the cost recovery was adequate. Patients were generally satisfied with the operations of the scheme, especially the quality of drug supply. However, basic dispensing and compounding formed the core of pharmacists' activities at the hospital with limited time for patient conselling and pharmacy clinical rounds.