To identify the risk factors associated with subgaleal haemorrhage and to assess the long-term neurological and developmental morbidity in survivors, data were prospectively collected over 5 years on 69 newborns with subgaleal haemorrhage from a cohort of 23,353 live and term deliveries, giving an incidence of subgaleal haemorrhage of 3.0 per 1000 live and term births. Multivariate analysis of risk factors associated with subgaleal haemorrhage on univariate analysis showed that prolonged second stage of labour (OR = 9.02; 95% CI 6.15-17.51), fetal distress (OR = 5.05; 95% CI 2.67-11.12), vacuum delivery (OR = 7.17; 95% CI 5.43-10.25), forceps delivery (OR = 2.66; 95% CI 1.78-5.18), and birthweight (OR = 2.20; 95% CI 1.54-6.56) significantly influenced the occurrence of subgaleal haemorrhage. When the effects of prolonged second stage of labour, fetal distress, birthweight and gestational age were controlled for, the odds of harbouring subgaleal bleed following vacuum delivery were, respectively, OR = 7.80 (95% CI 5.45-11.61), OR = 6.15 (95% CI 3.71-10.84), OR = 5.01 (95% CI 2.78-9.63) and OR = 7.65 (95% CI 4.73-16.65). Among the 69 newborns with subgaleal haemorrhage, ten (14%) died and twelve (20%) of the 59 survivors were lost to follow-up. Of the remaining 47 survivors, three (6%) died during follow-up of diseases unrelated to the bleed, leaving 44 survivors, none of whom had either neurological deficit or developmental delay. The study concludes that subgaleal haemorrhage in neonates is the result of birth trauma associated with difficult instrumental delivery. Newborns with subgaleal haemorrhage who survive the acute episode of the bleed show no evidence of subsequent long-term neurological deficit or developmental delay.