OBJECTIVE: To examine causes of perinatal mortality in the Faroe Islands, where it has been increased compared to other Nordic societies. METHOD: Cases were classified according to a fetal/obstetric, a fetal/neonatal, and a fetal/obstetric/neonatal classification (classifications C1, C2, and C3, respectively). SETTING: The Faroe Islands 1986-1995; as reference materials were used a) the preceding decade in the Faroes and b) a parallel period in Denmark. SUBJECTS: We examined all available information regarding each case from hospital records, midwife records, birth certificates, death certificates and autopsy records. RESULTS: The perinatal mortality was 10.3 per 1,000 total births (83/8,096) compared with 13.7 (102/7,458) in the preceding decade; the fall could be attributed to fewer cases with preeclampsia, antepartum bleedings (C1) and antepartum asphyxia (C2) and the number fell despite an increased occurrence of cases attributed to congenital malformations. Perinatal mortality in Denmark was 8.3 (4,574/550,971), where rates were lower of cases with congenital malformations and fetoplacental dysfunction, but where the rate was higher of cases related to preterm birth (C3). CONCLUSIONS: Although the perinatal mortality rate still is higher in the Faroes than Denmark, the rate had fallen in the Faroes from 1976-85 to 1986-1995. The fall was mainly due to fewer cases attributable to antepartum asphyxia, preeclampsia, antepartum bleedings, and hyaline membrane disease, a pattern compatible with a more efficient perinatal service in the Faroes in the latter period.