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The serious health hazards posed by drug allergies have long been recognized and are commonly encountered in daily pediatric practice. Our general lack of knowledge of the pathomechanims greatly hampers our ability to correctly diagnose allergic drug reactions. The present review addresses the most recent literature regarding the diagnosis of allergy for the most commonly implicated drugs in children, that is, antibiotics, nonsteroidal anti-inflammatory drugs (NSAID) and vaccines.Systematic approaches have been proposed and, if implemented, will likely reduce the number of children being inappropriately labeled as ‘drug allergic’. In case of suspicion of an allergy, a complete allergy work-up should always be performed. This evaluation based on carefully selected diagnostic tests will differ according to the drug involved and the mechanisms suspected. The drug provocation test remains the gold standard and has gained in importance, particularly in children presenting with a benign rash while taking antibiotic treatment. Several new diagnostic tools are currently under investigation and provide promising results.Accurate diagnosis of drug allergy is important not only to prevent serious or even life-threatening reactions, but also to avoid unnecessary drug restriction associated with increased resistance and healthcare costs.