Background Sepsis is a leading cause of perinatal death in developing countries. Vaginal organisms acquired during labor play a significant role. Prior studies suggest that chlorhexidine wiping of the maternal vagina during labor and of the neonate may reduce peripartum infections. Methods We performed a placebo-controlled, randomized trial of chlorhexidine vaginal and neonatal wipes to reduce neonatal sepsis and mortality in three hospitals in Pakistan. The primary study outcome was a composite of neonatal sepsis or 7-day perinatal mortality. Findings From 2005 to 2008, 5,008 laboring women and their neonates were randomized to receive either chlorhexidine wipes (n = 2,505) or wipes with a saline placebo (n = 2,503). The primary outcome was similar in the chlorhexidine and control groups, (3.1% vs. 3.4%; RR 0.91, 95% CI 0.67, 1.24), as was the composite rate of neonatal sepsis or 28-day perinatal mortality, (3.8% vs. 3.9%, RR 0.96, 95% CI 0.73, 1.27). At day 7, the chlorhexidine group had a lower rate of neonatal skin infection. (3.3 vs. 8.2%, p<0.0001) With the exception of less frequent 7-day hospitalization in the chlorhexidine group, there were no significant differences in maternal outcomes between the groups. Interpretation This trial provides evidence that the use of maternal chlorhexidine vaginal wipes during labor and neonatal chlorhexidine wipes does not reduce maternal and perinatal mortality or neonatal sepsis. The finding of reduced superficial skin infections on day 7 without change in sepsis or mortality suggests that this difference, although statistically significant, may not be of major importance. Trial Registration: Clinicaltrials.gov: NCT00121394