BACKGROUND: Anti-malarial regimens containing sulphonamide or artemisinin ingredients are widely used in malaria-endemic countries. However, evidence of the incidence of adverse drug reactions (ADR) to these drugs is limited, especially in Africa, and there is a complete absence of information on the economic burden such ADR place on patients. This study aimed to document ADR incidence and associated household costs in three high malaria transmission districts in rural Tanzania covered by demographic surveillance systems. METHODS: Active and passive surveillance methods were used to identify ADR from sulphadoxine-pyrimethamine (SP) and artemisinin (AS) use. ADR were identified by trained clinicians at health facilities (passive surveillance) and through cross-sectional household surveys (active surveillance). Potential cases were followed up at home, where a complete history and physical examination was undertaken, and household cost data collected. Patients were classified as having 'possible' or 'probable' ADR by a physician. RESULTS: A total of 95 suspected ADR were identified during a two-year period, of which 79 were traced, and 67 reported use of SP and/or AS prior to ADR onset. Thirty-four cases were classified as 'probable' and 33 as 'possible' ADRs. Most (53) cases were associated with SP monotherapy, 13 with the AS/SP combination (available in one of the two areas only), and one with AS monotherapy. Annual ADR incidence per 100,000 exposures was estimated based on 'probable' ADR only at 5.6 for AS/SP in combination, and 25.0 and 11.6 for SP monotherapy. Median ADR treatment costs per episode ranged from US$2.23 for those making a single provider visit to US$146.93 for patients with four visits. Seventy-three per cent of patients used out-of-pocket funds or sold part of their farm harvests to pay for treatment, and 19% borrowed money. CONCLUSION: Both passive and active surveillance methods proved feasible methods for anti-malarial ADR surveillance, with active surveillance being an important complement to facility-based surveillance, given the widespread practice of self-medication. Household costs associated with ADR treatment were high and potentially catastrophic. Efforts should be made to both improve pharmacovigilance across Africa and to identify strategies to reduce the economic burden endured by households suffering from ADR.