OBJECTIVE To compare the effect of rectal misoprostol with intramuscular oxytocin in the routine management of the third stage in a rural developing country. METHODS A randomized controlled trial was performed at two district hospitals in Ghana, West Africa. Four hundred fifty women in advanced labour were enrolled. The only exclusion criterion was a known medical contraindication to prostaglandin administration. Women were randomized to receive rectal misoprostol 800 microg or intramuscular oxytocin 10 IU with delivery of the anterior shoulder. The main outcome measure was change in hemoglobin concentration from before to after delivery. Secondary outcomes included the need for additional uterotonics, estimated blood loss, transfusion, and medication side effects. RESULTS Demographic characteristics were similar in each treatment group. There was no significant difference between treatment groups in change in hemoglobin (misoprostol 1.19 g/dL and oxytocin 1.16 g/dL; relative difference 2.6%; 95% confidence intervals [CI]-16.8% to 19.4%; P = 0.80). The only significant secondary outcome was shivering, which was more common in the misoprostol group (misoprostol 7.5% vs. oxytocin 0.9%; relative risk 8.0; 95% CI 1.86-34.36; P = 0.001). CONCLUSIONS Rectal misoprostol 800 microg is as effective as 10 IU intramuscular oxytocin in minimizing blood loss in the third stage of labour. Rectal misoprostol has a lower incidence of side effects than the equivalent oral dose. This confirms the utility of misoprostol as a safe and effective uterotonic for use in the rural and remote areas of developing nations where other pharmacologic agents may be less feasible.