BACKGROUND: The Norwegian Board of Health has proposed to divide the delivery units into three categories. For several of today's smaller consultant managed units this could lead to a reclassification into midwife managed units. MATERIAL AND METHODS: During 1997 and 1998 the community hospital in Lofoten has tried out a modified type of midwife managed unit. By a continuous selection process a high risk and a low risk group of gravidas were identified. The high risk group was referred to the central hospital in Bodø, while the low risk group was offered to deliver locally. RESULTS: Previously more than 90% delivered at the community hospital in Lofoten, while approximately 70% still delivered locally during the trial period. There were no deliveries during transport and no serious complications for mother or child caused by the new system. The community hospital had facilities for performing emergency caesarean sections. In 1997 nine caesarean sections out of 211 deliveries and in 1998 four out of 224 were performed. The caesarean section rate for the total population was lower during the trial period than over the previous five years. INTERPRETATION: A modified midwife managed unit could be a good alternative for small consultant managed units if the Norwegian Board of Health's proposal is carried through.