Introduction: The optimal management of Isolated Oligohydramnios (IO) is controversial. The general consensus is to deliver after 36 weeks. This has led to higher rates of obstetric interventions and adverse neonatal outcomes. Aim: To compare the pregnancy and perinatal outcomes of low-risk pregnancies with IO (Amniotic Fluid Index [AFI] <5 cm) with that of low-risk pregnancies with normal levels of amniotic fluid. Materials and Methods: A prospective cohort study was conducted at the Department of Obstetrics and Gynaecology at Government Medical College, Ernakulam, from April 2018 to March 2020. A total of 66 low-risk singleton pregnancies with IO (AFI <5 cm) between 34 and 40 weeks of gestation were compared with 132 low-risk pregnancies with normal AFI (AFI 5-24), matched by parity and gestational age. The obstetric outcomes measured were gestational age at delivery, mode of delivery, presence of Meconium-Stained Amniotic Fluid (MSAF), presence of Non-reassuring Foetal Heart Rate (NRFHR), stillbirth, and maternal complications. Neonatal outcomes measured were prematurity, birth weight, admission to the Neonatal Intensive Care Unit (NICU), duration of NICU stay, and the presence of Respiratory Distress Syndrome (RDS), Transient Tachypnea of the Newborn (TTN), Meconium Aspiration Syndrome (MAS), seizures, Necrotising Enterocolitis (NEC), Intraventricular Haemorrhage (IVH), Hypoxic Ischemic Encephalopathy (HIE), need for phototherapy, infectious morbidity like suspected or culture-proven sepsis, hypothermia, hypoglycaemia, and Neonatal Death (NND). A composite adverse neonatal outcome was defined as the presence of any one of the above. Continuous variables were calculated as mean with Standard Deviation (SD) or median with Interquartile Range (IQR) as appropriate. The test of significance done using the Student’s t-test. Categorical variables were calculated as numbers (%) and compared using the Chi-square test and Fisher’s exact test. All tests were two-sided, and a p-value of less than 0.05 was considered statistically significant. Results: The mean age of patients in the low AFI group was 26±4.87 years, while in the normal AFI group, it was 24.8±4.39 years. Pregnancies complicated by IO were characterised by a higher rate of labour induction {38 (57.6%) vs. 26 (19.7%), p-value<0.001} and caesarean delivery {34 (51.5%) vs. 35 (26.5%), p-value<0.001}. IO had a significantly higher rate of low birth weight babies {35 (53%) vs. 28 (21.2%), p-value<0.001}, non-vertex presentations {6 (9.1%) vs. 0, p-value<0.001}, and NRFHR {10 (15.2%) vs. 6 (4.5%), p-value=0.001}. Neonates in the low AFI group had a higher rate of admission to the NICU {20 (30.3%) vs. 20 (15.2%)} and composite adverse outcomes {24 (36.4%) vs. 20 (15.2%)}. Conclusion: The isolated oligohydramnios is associated with a higher rate of labour induction, caesarean delivery, and low birth weight babies. Adverse neonatal outcomes may be due to the combined effects of prematurity and low birth weight, rather than to IO per se.