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Objective: To compare the costs of induction of labor and expectant management in women with preterm prelabor rupture of membranes (PPROM)., Design: Economic analysis based on a randomized clinical trial., Setting: Obstetric departments of eight academic and 52 non-academic hospitals in the Netherlands., Population: Women with PPROM near term who were not in labor 24 h after PPROM., Methods: A cost-minimization analysis was done from a health care provider perspective, using a bottom-up approach to estimate resource utilization, valued with unit-costs reflecting actual costs., Main Outcome Measures: Primary health outcome was the incidence of neonatal sepsis. Direct medical costs were estimated from start of randomization to hospital discharge of mother and child., Results: Induction of labor did not significantly reduce the probability of neonatal sepsis [2.6% vs. 4.1%, relative risk 0.64 (95% confidence interval 0.25-1.6)]. Mean costs per woman were €8094 for induction and €7340 for expectant management (difference €754; 95% confidence interval -335 to 1802). This difference predominantly originated in the postpartum period, where the mean costs were €5669 for induction vs. €4801 for expectant management. Delivery costs were higher in women allocated to induction than in women allocated to expectant management (€1777 vs. €1153 per woman). Antepartum costs in the expectant management group were higher because of longer antepartum maternal stays in hospital., Conclusions: In women with pregnancies complicated by PPROM near term, induction of labor does not reduce neonatal sepsis, whereas costs associated with this strategy are probably higher., (© 2014 Nordic Federation of Societies of Obstetrics and Gynecology.)