OBJECTIVE: We tested the hypothesis that intensified management of gestational diabetes mellitus on the basis of stringent glycemic control, verified glucose data, and adherence to an established criterion for insulin initiation results in near normoglycemia control and reduction of adverse outcomes. STUDY DESIGN: A prospective, population-based study compared the effect on perinatal outcome of conventional (n = 1316) and intensified (n = 1145) management. Group assignment was based on availability of memory-based reflectance meters at entry to the program. A contemporaneous randomized control group (nondiabetic, n = 4922) was selected. RESULTS: The diabetic groups were comparable in demographic characteristics and in factors associated with higher risk for adverse pregnancy outcome, such as previous macrosomia, previous gestational diabetes mellitus, and family history of diabetes. The control group was younger, less obese, and had a lower rate of previous macrosomia. The intensified management group had rates of macrosomia, cesarean section, metabolic complications, shoulder dystocia, stillbirth, neonatal intensive care unit days, and respiratory complications lower than those in the conventional management group and comparable to those of the nondiabetic controls. Other maternal complication rates, such as for preeclampsia, chronic hypertension, and infection, were similar for the three groups. Mean blood glucose levels were a good predictor of perinatal outcome. Gestational age at delivery, previous history of macrosomia, and overall mean blood glucose levels were the only significant predictors of birth weight percentile in both diabetic groups (logistic regression). CONCLUSION: The intensified management approach is significantly associated with enhanced perinatal outcome. This management strategy clarifies the relationship between glycemic control and neonatal outcome. (SM J OBSTET GYNECOL 1994; 170:1036-47.)