OBJECTIVE: Although substantial progress has been made in increasing access to care during childbirth, reductions in maternal and neonatal mortality have been slower. Poor-quality care may be to blame. In this study, we measure the quality of labour and delivery services in Kenya and Malawi using data from observations of deliveries and explore factors associated with levels of competent and respectful care. METHODS: We used data from nationally representative health facility assessment surveys. A total of 1100 deliveries in 392 facilities across Kenya and Malawi were observed and quality was assessed using two indices: the quality of the process of intrapartum and immediate postpartum care (QoPIIPC) index and a previously validated index of respectful maternity care. Data from standardised observations of care were analysed using descriptive statistics and multivariable random-intercept regression models to examine factors associated with variation in quality of care. We also quantified the variance in quality explained by each domain of covariates (patient-, provider- and facility-level and subnational divisions). RESULTS: Only 61-66% of basic elements of competent and respectful care were performed. In adjusted models, better-staffed facilities, private hospitals and morning deliveries were associated with higher levels of competent and respectful care. In Malawi, younger, primipara and HIV-positive women received higher-quality care. Quality also differed substantially across regions in Kenya, with a 25 percentage-point gap between Nairobi and the Coast region. Quality was also higher in higher-volume facilities and those with caesarean section capacity. Most of the explained variance in quality was due to regions in Kenya and to facility, and patient-level characteristics in Malawi. CONCLUSIONS: Our findings suggest considerable scope for improvement in quality. Increasing staffing and shifting births to higher-volume facilities - along with promotion of respectful care in these facilities - should be considered in sub-Saharan Africa to improve outcomes for mothers and newborns.