BACKGROUND:Anaemia is the commonest global public health problem and especially harmful when the pregnancy is complicated by anaemia. Women in reproductive age group are more vulnerable for iron deficiency anaemia with an estimated prevalence of around 70 to 80% in pregnant women. MATERIAL AND METHODS: The aim of the study was to analyse the foetal outcome in the hospitalised pregnant women with severe anaemia. This is a prospective study carried out at maternity ward of Government General Hospital, Kurnool of Andhra Pradesh, India over a period of one year from October 2007 to September 2008. RESULTS: Total of 9731 deliveries occurred during the study period, 282 (2.89 %) were severely anaemic at the time of delivery. Majority of the women were of 20-24 years age (68.4%) with second gravidas 37.5%, term gestation 52.1%, preterm deliveries 47.9%, lower socio-economic status 87.6% and Unbooked cases 67.4% and low birth weight in 53.2% cases, intra uterine growth retardation and intra uterine foetal death contributes to 12.8% and 16.7% cases respectively. A total of 36 (12.8%) neonates required admission in neonatal intensive care unit and 16(5.7%) of them died. CONCLUSION: Severe anaemia during pregnancy has adverse perinatal outcome in the form of low birth weight, preterm birth, intrauterine growth retardation and intrauterine death. Regular iron supplementation during the antenatal period, management of anaemia and improving the nutritional status of the mother will improve the adverse neonatal outcome and decreases perinatal morbidity and mortality.