A retrospective case record analysis of all perinatal and late neonatal deaths in Iceland in the periods 1976-80 and 1981-85 was done and the causes of death classified according to the extended Aberdeen classification. There was a significant (p less than 0.0001) reduction in number of deaths between the two periods with perinatal mortality rates declining from 10.6/1000 in 1976-80 to 6.8/1000 in 1981-85. In 1976-80 there were 81 (33%) antepartum, 37 (15%) intrapartum and 128 (52%) neonatal deaths compared to 61 (38%) antepartum, 13 (8%) intrapartum and 86 (54%) neonatal deaths in 1981-85. Fetal abnormality was the most common cause of death in both periods followed by the category Low birthweight in 1976-80. In 1981-85 increased morphological detection of infection in infants of very low birthweight by placental examination and autopsies lead to a shift from the category Low birthweight to Maternal Disease, the second most common cause in that period. To achieve lower perinatal mortality rates efforts should be directed towards lowering antepartum losses near term and increasing survival of very low birthweight infants.