Objective The aim of this study was to investigate the maternal and neonatal morbidity related to use of episiotomy for vacuum and forceps deliveries. Design Retrospective population-based cohort study. Setting Dundee, Scotland. Population Two thousand one hundred and fifty three women who experienced an instrumental vaginal delivery between January 1998 and December 2002. Methods Univariate and multivariate logistic regression analyses were performed comparing deliveries with and without the use of episiotomy. Main outcome measures Extensive perineal tears (third and fourth degree) and shoulder dystocia. Results Two hundred and forty-one (11%) of the 2153 women who underwent instrumental vaginal deliveries did not receive an episiotomy. Vacuum delivery was associated with less use of episiotomy compared with forceps (odds ratio 0.10, 95% CI 0.07-0.14). Extensive perineal tears were more likely with use of episiotomy (7.5%vs 2.5%, adjusted OR 2.92, 95% CI 1.27-6.72) as was neonatal trauma (6.0%vs 1.7%, adjusted OR 2.62, 95% CI 1.05-6.54). Use of episiotomy did not reduce the risk of shoulder dystocia (6.9%vs 4.6%, adjusted OR 1.43, 95% CI 0.74-2.76). The findings were similar for delivery by vacuum and forceps. Conclusion The use of episiotomy increased the risk of extensive perineal tears without a reduction in the risk of shoulder dystocia.