Background: The use of Oxytocin for labor induction may cause receptor exhaustion and thus making its use in the third stage of labor ineffective in reducing postpartum blood loss as compared to other uterotonics. Objective:To investigate whether rectally administered Misoprostol during the third stage of labor is more efficient than Oxytocin in reducing postpartum blood loss in patients with initial labor induction by Oxytocin. Methods: In a prospective randomized controlled trial, women who were admitted for labor induction using Oxytocin were randomly assigned to receive either 1000 mcg Misoprostol per rectum (study group) or 20 units Oxytocin intravenously at a rate of 150ml/h (control group) in the third stage of labor immediately following cord clamping. The third stage of labor was managed actively in all patients. Other uterotonics were administered only if blood loss seemed more than usual. Blood loss was estimated by the obstetrician and differences in hemoglobin were measured before and after delivery. Results: Multivariate analysis showed that the adjusted odds ratio regarding estimated blood loss was 1.96, hence patients in the Oxytocin group are more likely to have blood loss >500 compared to patients in the Misoprostol group (P=0.07). The percent drop in hemoglobin was 1.21 more in the Oxytocin group with a trend towards significance (p=0.08). The adjusted beta coefficient was 1.29 regarding percent drop in hematocrit, thus patients in the Oxytocin group tend to have higher drop in hematocrit There was no difference in postpartum diarrhea or fever but shivering was confined to the Misoprostol group (8.4%). Conclusion: Rectal Misoprostol administered in the third stage of labor after labor induction by Oxytocin showed a trend towards significantly reducing postpartum blood loss and incidence of postpartum hemorrhage.