OBJECTIVES: To estimate the incidence of maternal morbidity during labour and the puerperium in rural homes, the association with perinatal outcome and the proportion of women needing medical attention. DESIGN: Prospective observational study nested in a neonatal care trial. SETTING: Thirty-nine villages in the Gadchiroli district, Maharashtra, India. SAMPLE: Seven hundred and seventy-two women recruited over a one year period (1995-1996) and followed up from the seventh month in pregnancy to 28 days postpartum (up to 10 visits in total). METHODS: Observations at home by trained village health workers, validated by a physician. Diagnosis of morbidities by computer program. MAIN OUTCOMES: Direct obstetric complications during labour and the puerperium, breast problems, psychiatric problems and need for medical attention. RESULTS: The incidence of maternal morbidity was 52.6%, 17.7% during labour and 42.9% during puerperium. The most common intrapartum morbidities were prolonged labour (10.1%), prolonged rupture of membranes (5.7%), abnormal presentation (4.0%) and primary postpartum haemorrhage (3.2%). The postpartum morbidities included breast problems (18.4%), secondary postpartum haemorrhage (15.2%), puerperal genital infections (10.2%) and insomnia (7.4%). Abnormal presentation and some puerperal complications (infection, fits, psychosis and breast problems) were significantly associated with adverse perinatal outcomes, but prolonged labour was not. A third of the mothers were in need of medical attention: 15.3% required emergency obstetric care and 24.0% required non-emergency medical attention. CONCLUSIONS: Nearly 15% of women who deliver in rural homes potentially need emergency obstetric care. Frequent (43%) postpartum morbidity, and its association with adverse perinatal outcome, suggests the need for home-based postpartum care in developing countries for both mother and baby.