BACKGROUND: Improving quality of care is a key priority to reduce neonatal mortality and stillbirths. The Safe Care, Saving Lives programme aimed to improve care in newborn care units and labour wards of 60 public and private hospitals in Telangana and Andhra Pradesh, India, using a collaborative quality improvement approach. Our external evaluation of this programme aimed to evaluate programme effects on implementation of maternal and newborn care practices, and impact on stillbirths, 7- and 28-day neonatal mortality rate in labour wards and neonatal care units. We also aimed to evaluate programme implementation and mechanisms of change. METHODS: We used a quasi-experimental plausibility design with a nested process evaluation. We evaluated effects on stillbirths, mortality and secondary outcomes relating to adherence to 20 evidence-based intrapartum and newborn care practices, comparing survey data from 29 hospitals receiving the intervention to 31 hospitals expected to receive the intervention later, using a difference-in-difference analysis. We analysed programme implementation data and conducted 42 semi-structured interviews in four case studies to describe implementation and address four theory-driven questions to explain the quantitative results. RESULTS: Only 7 of the 29 intervention hospitals were engaged in the intervention for its entire duration. There was no evidence of an effect of the intervention on stillbirths [DiD - 1.3 percentage points, 95% CI - 2.6-0.1], on neonatal mortality at age 7 days [DiD - 1.6, 95% CI - 9-6.2] or 28 days [DiD - 3.0, 95% CI - 12.9-6.9] or on adherence to target evidence-based intrapartum and newborn care practices. The process evaluation identified challenges in engaging leaders; challenges in developing capacity for quality improvement; and challenges in activating mechanisms of change at the unit level, rather than for a few individuals, and in sustaining these through the creation of new social norms. CONCLUSION: Despite careful planning and substantial resources, the intervention was not feasible for implementation on a large scale. Greater focus is required on strategies to engage leadership. Quality improvement may need to be accompanied by clinical training. Further research is also needed on quality improvement using a health systems perspective.