We investigated the variation of stillbirth and neonatal mortality due to congenital anomalies in relation to small-area measures of deprivation in a population-based study in England and Wales, 1986–96. We found 10 954 stillbirths and neonatal deaths from all non-chromosomal and chromosomal anomalies during the study period out of a total of 7 487 007 live and stillbirths. The extended perinatal mortality rate (EPM rate) (defined as babies who were stillborn or died within 28 completed days after birth per 10 000 total live and stillbirths) for all chromosomal and all non-chromosomal anomalies was 1.5/10 000 and 13.2/10 000, respectively, over the whole period. The rate for non-chromosomal anomalies halved over the decade while the rate for chromosomal anomalies remained unchanged. The relative risks of EPM for chromosomal and non-chromosomal anomalies were 0.71 [0.80, 0.95] and 1.17 [95%CI 1.06, 1.30], respectively, in the group of wards with highest deprivation compared with the least deprived group. Increasing gradients of EPM with increasing deprivation were observed for (1) grouped non-chromosomal anomalies including neural tube defects, all renal and urinary anomalies, all musculoskeletal anomalies, and multiple anomalies, and (2) several specific non-chromosomal anomalies including anencephaly, limb reduction defects, diaphragm and abdominal wall defects. This study provides strong evidence that increased deprivation is associated with increased EPM due to most non-chromosomal anomalies; the finding of decreased relative risk for chromosomal anomalies is probably related to differences in maternal age distribution between deprivation groups.