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To examine the association between retention in methadone treatment during pregnancy and key neonatal outcomes.Client data from the New South Wales Pharmaceutical Drugs of Addiction System was linked to birth information from the NSW Midwives Data Collection and the NSW Inpatient Statistics Collection from 1992 to 2002.Obstetric and perinatal characteristics of women who were retained continuously on methadone maintenance throughout their pregnancy were compared to those who entered late in their pregnancies (less than 6 months prior to birth) and those whose last treatment episode ended at least 1 year prior to birth.There were 2993 births to women recorded as being on methadone at delivery, increasing from 62 in 1992 to 459 births in 2002. Compared to mothers who were maintained continuously on methadone throughout their pregnancy, those who entered treatment late also presented later to antenatal services, were more likely to arrive at hospital for delivery unbooked, were more often unmarried, indigenous and smoked more heavily. A higher proportion of neonates born to late entrants were born at less than 37 weeks gestation and were admitted to special care nursery more often.Continuous methadone treatment during pregnancy is associated with earlier antenatal care and improved neonatal outcomes. Innovative techniques for early engagement in methadone treatment by pregnant heroin using women or those planning to become pregnant should be identified and implemented.