Summary: We evaluate the cost consequence of a voluntary early obstetrical discharge programme in a military teaching hospital. The study involved a control group of routine obstetrical discharge patients with uncomplicated vaginal delivery from March 1 to August 31, 1994 and the study group of early obstetrical discharge (24–48 hours) patients with uncomplicated vaginal delivery from March 1 to August 31, 1996. There were 1,042 total control patients with routine vaginal delivery totalling 2,668 hospital days with a mean number of hospital days of 2.56 per patient. The study group of early obstetrical discharge patients with uncomplicated vaginal delivery encompassed 1,050 patients with 1,965 hospital days with mean hospital days of 1.87 per patient (p <0.05) without an increase in postpartum clinic or emergency room visits. The total cost of admissions (cost calculation of $1,221 per hospital day) fell from $3,257, 628 in the routine discharge group to $2,399,625 in the early discharge cohort showing a total cost savings of $858,003 over the 6-months study period. The average cost per obstetrical admission for routine vaginal delivery fell from $3,126 per day to $2,285 per day without an increase in the postpartum paediatric adverse outcomes. Maternal postpartum readmission rates were statistically significantly increased (p <0.05) in the study group at 0.6% with an OR[2.32(2.17, 6.92)] but all readmissions fell outside the 48-hour early discharge window. This programme showed significant cost savings without concomitant increase in paediatric or maternal adverse outcomes.