Objective: To compare the effect of induction of labour with a policy of expectant monitoring for intrauterine growth restriction near term. Design: Multicentre randomised equivalence trial (the Disproportionate Intrauterine Growth Intervention Trial At Term (DIGITAT)). Setting: Eight academic and 44 non-academic hospitals in the Netherlands between November 2004 and November 2008. Participants: Pregnant women who had a singleton pregnancy beyond 36+0 weeks' gestation with suspected intrauterine growth restriction. Interventions: Induction of labour or expectant monitoring. Main outcome measures: The primary outcome was a composite measure of adverse neonatal outcome, defined as death before hospital discharge, five minute Apgar score of less than 7, umbilical artery pH of less than 7.05, or admission to the intensive care unit. Operative delivery (vaginal instrumental delivery or caesarean section) was a secondary outcome. Analysis was by intention to treat, with confidence intervals calculated for the differences in percentages or means. Results: 321 pregnant women were randomly allocated to induction and 329 to expectant monitoring. Induction group infants were delivered 10 days earlier (mean difference -9.9 days, 95% CI -11.3 to -8.6) and weighed 130 g less (mean difference -130 g, 95% CI -188 g to -71 g) than babies in the expectant monitoring group. A total of 17 (5.3%) infants in the induction group experienced the composite adverse neonatal outcome, compared with 20 (61%) in the expectant monitoring group (difference -0.8%, 95% CI -4.3% to 3.2%). Caesarean sections were performed on 45 (14.0%) mothers in the induction group and 45 (13.7%) in the expectant monitoring group (difference 0.3%, 95% CI -5.0% to 5.6%). Conclusions: In women with suspected intrauterine growth restriction at term, we found no important differences in adverse outcomes between induction of labour and expectant monitoring. Patients who are keen on non-intervention can safely choose expectant management with intensive maternal and fetal monitoring; however, it is rational to choose induction to prevent possible neonatal morbidity and stillbirth. Trial registration: International Standard Randomised Controlled Trial number ISRCTN10363217.