In this study the effect of intraumbilical oxytocin on duration and amount of blood loss in third stage of labour was studied. Pregnant women were randomized into 2 groups of 50 each. Group I <study group> was managed actively with 10 units of oxytocin diluted in 20 ml saline given through umbilical vein immediately after cord claming and Group II <control group> managed traditionally with oxytocin infusion 10 units in 250 ml of dexrose saline at rate of 125 ml/hr given after delivery of baby. In the study group there was a statistically significant decrease in duration of third stage of labour <1.48 min vs 3.27 min>, fall in haemoglobin <1.2 g/dl vs 1.96 g/dl> and fall in haematocrit <3.88% Vs 7.20%<. It was concluded that intraumbilical oxytocin appears to be a useful, safe and practical method for active management of third stage.