Objective To investigate the methodological characteristics of observational studies on the correlation between drug exposure during pregnancy and birth defects. Methods The PubMed database was searched from January 1, 2020 to December 31, 2020 to identify observational studies investigating the correlation between drug use during pregnancy and birth defects. Literature screening and data extraction were conducted by two researchers and statistical analysis was performed using R 3.6.1 software. Results A total of 40 relevant articles were identified, of which 8 (20.0%) were published in the four major medical journals and their sub-journals, 21 (42.5%) were conducted in Europe and the United States, and 4 were conducted (10.0%) in China. Cohort studies (30, 75.0%) and case-control studies (10, 25%) were the most commonly used study designs. Sixteen studies (40.0%) did not specify how the databases were linked. Sixteen studies (40.0%) did not report a clear definition of exposure, while 17 studies (42.5%) defined exposure as prescribing a drug that could not be guaranteed to have been taken by the pregnant women, possibly resulting in misclassification bias. Six studies (15.0%) did not report the diagnostic criteria for birth defects and 18 studies (45.0%) did not report the types of birth defects. In addition, 33 studies (82.5%) did not control for confounding factors in the study design, while only 19 studies (47.5%) considered live birth bias. Conclusion Improvements are imperative in reporting and conducting observational studies on the correlation between drug use during pregnancy and birth defects. This includes the methods for linking data sources, definition of exposure and outcomes, and control of confounding factors. Methodological criteria are needed to improve the quality of these studies to provide higher quality evidence for policymakers and researchers.