To evaluate the maternal and neonatal outcomes of pregnancies complicated with isolated oligohydramnios at term, managed by induction of labor. We conducted a retrospective case-control study. 138 women with uncomplicated oligohydramnios at term [amniotic fluid index (AFI)≤ 5 cm] and a low Bishop score (≤ 6) underwent induction of labor with prostaglandin E2. These women were compared to 67 women who underwent induction of labor at 42 weeks’ gestation and 276 women at low-risk pregnancy and spontaneous onset of labor, matched for parity and race. Cesarean section (CS) rate was similar in the study and the post-date group (17.4 and 17.9%, respectively), but significantly higher than the spontaneous labor group (5.8%, OR 3.42, 95% CI 1.75–6.68). No differences were found with other outcomes. Pregnancies with isolated oligohydramnios at term apparently are not at higher risk of perinatal complications, but induction of labor is associated with increased rate of CS.