In Japan, it is illegal to sell pharmaceuticals on Internet auction sites, although a considerable number of pharmaceuticals are listed on such sites. We investigated the current situation regarding the illegal trade in pharmaceuticals on Japanese Internet auction sites and the responses of site administrators to such transactions. We searched for pharmaceuticals and “gray” items that were suspected of being pharmaceuticals on Yahoo-oku! (Yahoo! Auctions, Japan) over a 37-day period and then submitted violation reports indicating that selling pharmaceuticals is illegal or that the description of an item was insufficient. The reports were directed to the site administrators and forwarded to the sellers. One hundred and six pharmaceutical products and 34 gray items were identified during the study period. After the submission of the violation reports, only 28 of the pharmaceutical products and one of the gray items were deleted by the administrator, while 18 of the pharmaceutical products and 7 of the gray items were withdrawn by their sellers. However, 41 pharmaceuticals and 20 gray items were sold. Most of the gray items were listed using characteristic terms or abbreviations without photographic images. More than 70% of the identified pharmaceuticals had a contraindication(s) other than hypersensitivity. In conclusion, the illegal trade in pharmaceuticals on Internet auction sites remains a serious problem in Japan, and the responses of site administrators to such transactions are inadequate. The government and pharmaceutical industry may have to take measures such as providing public and administrative guidance to stop the illegal trade in pharmaceuticals on the Internet.