Background and objectives: Drug and Therapeutics Committees (DTCs), which are essential for ensuring the rational use of drugs (RUD) in hospitals, have recently been established in Laos. Sub-optimal performance had been reported. The aims of this study were to determine those factors in the working environment that relate to DTC performance in Lao hospitals and evaluate whether DTC performance could be improved through an educational intervention utilizing auditing and feedback targeted towards DTC members. Methods: This was a quasi-experimental (before and after) study. Two central and seven provincial hospitals and the DTC members from these hospitals participated in the study. Performance of the DTCs was assessed by means of specifically developed indicators on structure and process combined with indicators for RUD and adherence to Standard Treatment Guidelines (STG). Data were collected for a 3-month period at baseline and for three consecutive periods thereafter. The results of the first three data collections were shared and discussed with the DTC members during feedback sessions. The DTC members were also interviewed in order to identify factors they thought may have an impact on DTC performance. Results: Following the intervention, there was a significant improvement in the overall score for DTC performance (p<0.001) and, in particular, in general activity and feedback and drug information to staff. The STG scores also improved (p<0.01). Interviews indicated that one negative factor was the experience of the DTC members being overloaded with other work, resulting in DTC meetings being held irregularly and drawing poor attendance. Conclusion: Continuous self-monitoring of performance by means of indicators, followed by feedback discussions, is suggested the means of improving the work of the DTC.