To facilitate increased utility of Neonatal Intensive Care Unit (NICU) beds, we adopted a policy of early discharge (ED) of infants < 2000 g to the hospital of their birth after recovery from acute illness and when the infant was breathing room air and taking adequate oral feedings. An inservice teaching program at the primary hospitals preceded such policy. In a 24-month period, 446 infants were referred to the NICU. 111 of 446 died; 335 infants survived. 114 of 335 were infants < 2000 g at birth; 42% (48 of 114) of them were discharged early to the hospital of their birth (ED); 58% were discharged late (LD) to their homes. 59.7% of the ED and 46.3% of the LD required assisted ventilation. Gestational age, birth weight, and final weight at discharge from hospitals were the same in both groups. None of the ED infants developed complications at the hospital of birth after retransfer. The length of NICU stay for LD was significantly higher 40 ± 6 (p < 0.001) than the ED; 20 ± 2.2 days. In addition, a 15% increase in bed utilization was also noted because of ED. We conclude that ED of infants from the NICU 1) increases utilization of beds; 2) decreases the cost of health care; and 3) increases the participation of primary physicians.