We investigated differentials and time trends in perinatal mortality and perinatal risk factors by geographic area of residence in South Australia during 1981-1994, to assess whether sociodemographic inequalities had lessened. The areas analysed were Adelaide and the country region of South Australia, with Adelaide being divided by socioeconomic status into two ares. Subjects were 267,116 singleton births of at least 400 g birthweight (or at least 20 weeks' gestation) notified to the state's perinatal data collection. Year of birth, residential area, and interactions between year of birth and residential area were analysed as predictors of perinatal risk factors and deaths. There was a statistically significant decline in the perinatal death rate in all residential areas (mainly because of a decrease in neonatal deaths), which did not vary significantly by area. The frequency of low birthweight (< 2500 g) increased in the country areas and in the lower socioeconomic areas of Adelaide, but not in the higher socioeconomic areas. Although premature births increased in all areas, the increase was less pronounced for the higher socioeconomic areas of Adelaide. By comparison, although all areas showed an increase in the proportions of mothers aged 35 years or over, the increase was larger for the higher socioeconomic areas. Australia has a national policy of reducing social inequalities in health status. Perinatal mortality rates declined in Adelaide and country residential areas from 1981 to 1994. This trend is favourable, but from the relativities of these rates by residential area, there is not compelling evidence of a reduction in inequalities.