OBJECTIVE: To evaluate the effect of Early Start, a managed care organization’s obstetric clinic-based perinatal substance abuse treatment program, on neonatal outcomes. STUDY DESIGN: Study subjects were 6774 female Kaiser Permanente members who delivered babies between July 1, 1995 and June 30, 1998 and were screened by completing prenatal substance abuse screening questionnaires and urine toxicology screening tests. Four groups were compared: substance abusers screened, assessed, and treated by Early Start (‘SAT,’ n=782); substance abusers screened and assessed by Early Start who had no follow-up treatment (‘SA,’ n=348); substance abusers who were only screened (‘S,’ n=262); and controls who screened negative (‘C,’ n=5382). RESULTS: Infants of SAT women had assisted ventilation rates (1.5%) similar to control infants (1.4%), but lower than the SA (4.0%, p=0.01) and S groups (3.1%, p=0.12). Similar patterns were found for low birth weight and preterm delivery. CONCLUSION: Improved neonatal outcomes were found among babies whose mothers received substance abuse treatment integrated with prenatal care. The babies of SAT women did as well as control infants on rates of assisted ventilation, low birth weight, and preterm delivery. They had lower rates of these three neonatal outcomes than infants of either SA or S women.