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ObjectiveTo compare perinatal and maternal morbidity and birth interventions in low-risk women giving birth in two freestanding midwifery units (FMUs) and two obstetric units (OUs).DesignA cohort study with a matched control group.SettingThe region of North Jutland, Denmark.Participants839 low-risk women intending FMU birth and a matched control group of 839 low-risk women intending OU birth were included at the start of care in labour. OU women were individually chosen to match selected obstetric/socio-economic characteristics of FMU women. Analysis was by intention to treat.Main outcome measuresPerinatal and maternal morbidity and interventions.ResultsNo significant differences in perinatal morbidity were observed between groups (Apgar scores <7/5, <9/5 or <7/1, admittance to neonatal unit, asphyxia or readmission). Adverse outcomes were rare and occurred in both groups. FMU women were significantly less likely to experience an abnormal fetal heart rate (RR: 0.3, 95% CI 0.2 to 0.5), fetal–pelvic complications (0.2, 0.05 to 0.6), shoulder dystocia (0.3, 0.1 to 0.9), occipital–posterior presentation (0.5, 0.3 to 0.9) and postpartum haemorrhage >500 ml (0.4, 0.3 to 0.6) compared with OU women. Significant reductions were found for the FMU group's use of caesarean section (0.6, 0.3 to 0.9), instrumental delivery (0.4, 0.3 to 0.6), and oxytocin augmentation (0.5, 0.3 to 0.6) and epidural analgesia (0.4, 0.3 to 0.6). Transfer during or <2 h after birth occurred in 14.8% of all FMU births but more frequently in primiparas than in multiparas (36.7% vs 7.2%).ConclusionComparing FMU and OU groups, there was no increase in perinatal morbidity, but there were significantly reduced incidences of maternal morbidity, birth interventions including caesarean section, and increased likelihood of spontaneous vaginal birth. FMU care may be considered as an adequate alternative to OU care for low-risk women. Pregnant prospective mothers should be given an informed choice of place of birth, including information on transfer.