Objective: The purpose of this study was to test the ability of a clearly defined classification system for electronic fetal heart rate monitoring to predict early neonatal outcome. Study Design: All labors of women with singleton pregnancies ≥32 weeks’ gestation electronically monitored at 2 institutions were examined. Tracings in the final hour before delivery were defined as normal, fetal stress, or fetal distress. After delivery, Apgar scores, cord blood gas values, and admission to the neonatal intensive care unit were examined as measures of early neonatal outcome. Results: Among the 898 patients who qualified for study, 627 (70%) had tracings classified as normal, 263 (29%) had tracings classified as fetal stress, and 8 (1%) had tracings classified as fetal distress. There was a significant worsening of neonatal outcome across these 3 groups with regard to depressed Apgar scores 1 minute (5.1%, 18.3%, and 75.0%; P < .05), depressed Apgar scores at 5 minutes (1.0%, 3.8%, and 37.5%; P < .05), and admission to the neonatal intensive care unit (5.6%, 10.6%, and 37.5%; P < .05). There was also a progressive worsening of cord blood pH (7.27 ± 0.06, 7.21 ± 0.08, and 7.06 ± 0.14; P < .05), a progressive increase in PCO₂ (53.39 ± 8.34 mm Hg, 58.51 ± 10.55 mm Hg, and 78.31 ± 20.35 mm Hg; P < .05), and a progressive decline in base excess (–3.18 ± 2.02 mEq/L, –5.11 ± 3.11 mEq/L, and –9.07 ± 4.59 mEq/L; P < .05). Conclusion: This simple classification system for interpreting fetal heart rate tracings accurately predicts normal outcomes for fetuses as well discriminating fetuses in true distress. Further, it identifies an intermediate group of fetuses with a condition labeled fetal stress who might benefit from additional evaluation and possibly from expeditious delivery. (Am J Obstet Gynecol 2000;182:214-20.)