Context: Pregnant women in rural areas may give birth in either rural or urban hospitals. Differences in outcomes between rural and urban hospitals may influence patient decision making. Purpose: Trends in rural and urban obstetric deliveries and neonatal and maternal mortality in California were compared to inform policy development and patient and provider decision making in rural health care settings. Methods: Deliveries in California hospitals identified by the California Department of Health Services, Birth Statistical Master Files for years 1998 through 2002 were analyzed. Three groups of interest were created: rural hospital births to all mothers, urban hospital births to rural mothers, and urban hospital births to urban mothers. Findings: Of 2,620,096 births analyzed, less than 4% were at rural hospitals. Neonatal death rates were significantly higher in babies born to rural mothers with no pregnancy complications who delivered a normal weight baby vaginally at an urban hospital compared to urban mothers delivering at an urban hospital (0.2 [CI 0.2-0.4] deaths per 1,000 births versus 0.1 [CI 0.1-0.1]). Logistic regression analysis showed that delivery in a rural hospital was a protective factor compared to urban mothers delivering in an urban hospital, with an odds ratio of 0.8 (CI 0.6-0.9). Maternal death rates were not different. Conclusions: Rural obstetric services in this period showed favorable neonatal and maternal safety profiles. This information should reassure patients considering a rural hospital delivery, and aid policy makers and health care providers striving to ensure access to obstetric services for rural populations.