To estimate the effect of NICU admission of low-acuity infants born at 35 weeks’ gestation versus care in a mother/baby unit, on inpatient and outpatient medical outcomes. This retrospective cohort study included 5929 low-acuity infants born at 350/7 to 356/7 weeks’ gestation at 13 Kaiser Permanente Northern California hospitals with level II or level III NICUs between January 1, 2011, and December 31, 2021. Exclusion criteria included congenital anomalies and early respiratory support or antibiotics. We used multivariable regression and regression discontinuity analyses to control for confounding variables. Infants admitted to the NICU within 2 hours of birth (n = 862, 14.5%) had a 58 hour adjusted (98-hour unadjusted) longer length of stay. NICU admission was associated with an increased probability of a length of stay ≥96 hours (67% vs 21%; adjusted odds ratio [aOR], 4.94; 95% confidence interval [CI], 3.96-6.16). Regression discontinuity results suggested a similar (57 hour) increase in length of stay. Readmission risk, primarily for jaundice, was lower for those admitted to the NICU (3% vs 6%; aOR, 0.43; 95% CI, 0.27-0.69). Infants admitted to the NICU were slightly less likely to be receiving exclusive breast milk at 6-month follow-up (15% vs 25%; aOR, 0.73; 95% CI, 0.55-0.97; adjusted marginal risk difference -5%). Admitting low-acuity infants born at 35 weeks’ gestation to the NICU was associated with decreased readmission, but with longer length of stay and decreased exclusive breast milk feeding at 6 months. Routine NICU admission may be unnecessary for low-acuity infants born at 35 weeks’ gestation.