Medication errors (MEs) result in preventable harm to nursing home (NH) residents and pose a significant financial burden. Institutionalized older people are particularly vulnerable because of various organizational and individual factors. This systematic review reports the prevalence of MEs leading to hospitalization and death in NH residents and the factors associated with risk of death and hospitalization. A systematic search was conducted of the relevant peer-reviewed research published between January 1, 2000, and October 1, 2015, in English, French, German, or Spanish examining serious outcomes of MEs in NHs residents. Eleven studies met the inclusion criteria and examined three types of MEs: all MEs (n = 5), transfer-related MEs (n = 5), and potentially inappropriate medications (PIMs) (n = 1). MEs were common, involving 16–27% of residents in studies examining all types of MEs and 13–31% of residents in studies examining transfer-related MEs, and 75% of residents were prescribed at least one PIM. That said, serious effects of MEs were surprisingly low and were reported in only a small proportion of errors (0–1% of MEs), with death being rare. Whether MEs resulting in serious outcomes are truly infrequent, or are underreported because of the difficulty in ascertaining them, remains to be elucidated to assist in designing safer systems.