Background: Diabetes in pregnancy represent a risk condition for adverse maternal and neonatal outcomes and many of these complications might occur during labor and delivery. The aim of the study was to evaluate the effect of diabetes mellitus on cesarean section rate and neonatal outcome at Zagazig Univesity Maternity Hospitals. Patients & methods: This prospective cohort study was carried out at Zagazig University Maternity Hospitals, Zagazig, Sharkia, Egypt, from January 2018 till April 2019 on 102 pregnant women, they were divided into two groups; 51 diabetic cases represent group A and another 51 non-diabetic cases represent group B. Full history was taken, general and abdominal examination and Trans-abdominal ultrasound was done to assess gestational age, presentation, fetal weight and fetal biophysical profile. Per vaginal examination to assess cervical condition by Bishop score at time of delivery. Results: The rate of cesarean delivery was significantly higher in diabetic group than non-diabetic group (49.0% VS 25.5%, p=0.014). Maternal complications regarding cervical lacerationsn, perineal tears and post-partum haemorrhage were higher in diabetic group but with no significant difference. Neonatal complications were significanthy higher in diabetic group regarding macrosomia, low Apgar score, jaundice, hypoglycemia and neonatal intensive care unit admission. Conclusion: Diabetic pregnant mothers are more exposed to complications during pregnancy and during delivery. Cesarean section rate is increased with diabetec patients. Neonates of diabetic pregnant mothers are at higher risk of macrosomia. They are also more exposed to hypoglycemia, hyperbilirubinemia and NICU admission.