We investigated the relation of hospital delivery volume and nursery technology level to perinatal outcome in 226,164 White singleton births in Washington State, 1980-83. Level III facilities (neonatal intensive care unit) were defined by the state licensing commission. We defined the Level II (intermediate) and Level I (normal newborn) facilities using published criteria. Infants under 2000 gm born in Level III facilities had half the risk of perinatal death compared to those born in a Level I or II facility. No significant improvement was noted among level or volume groupings for normal birthweight infants. A loglinear regression model of hospital perinatal death rates showed that when birthweight and maternal risk were controlled, obstetrical volume added minimal explanatory power to level of nursery care.