Background: Defensive medicine is the practice of diagnostic or therapeutic measures conducted primarily as a safeguard against possible malpractice liability. We studied the extent, reasons, and characteristics of defensive medicine in the Israeli health care system. Methods and Findings: Cross-sectional study performed in the Israeli health care system between April and July 2008 in a sample (7%) of board certified physicians from eight medical disciplines (internal medicine, pediatrics, general surgery, family medicine, obstetrics and gynecology, orthopedic surgery, cardiology, and neurosurgery). A total of 889 physicians (7% of all Israeli board certified specialists) completed the survey. The majority [60%, (95%CI 0·57-0·63)] reported practicing defensive medicine; 40% (95%CI 0·37-0·43) consider every patient as a potential threat for a medical lawsuit; 25% (95%CI 0·22-0·28) have previously been sued at least once during their career. Independent predictors for practicing defensive medicine were surgical specialty [OR = 1.6 (95%CI 1·2-2·2), p = 0·0004], not performing a fellowship abroad [OR = 1·5 (95%CI 1·1-2), p = 0·027], and previous exposure to lawsuits [OR = 2·4 (95%CI 1·7-3·4), p&0·0001]. Independent predictors for the risk of being sued during a physician's career were male gender [OR = 1·6 (95%CI 1·1-2·2), p = 0·012] and surgery specialty [OR = 3·2 (95%CI 2·4-4·3), p&0·0001] (general surgery, obstetrics and gynecology, orthopedic surgery, and neurosurgery). Conclusions: Defensive medicine is very prevalent in daily physician practice in all medical disciplines. It exposes patients to complications due to unnecessary tests and procedures, affects quality of care and costs, and undermines doctor-patient relationships. Further studies are needed to understand how to minimize defensive medicine resulting from an increased malpractice liability market.