Substance use during pregnancy is associated with poor neonatal outcomes. Women incarcerated during pregnancy may have a history of substance use, and their babies may be at risk of neonatal abstinence syndrome (NAS). This study examines the incidence of NAS and other outcomes in infants born to currently or formerly incarcerated women. Infants born between 1985 and 2011 in Western Australia were divided into three mutually exclusive groups: born to women incarcerated during pregnancy (n = 708); born within 9–24 months of the mother's release from prison (n = 651); and born to women who were never incarcerated (n = 17,712). The impact of the timing of incarceration during pregnancy was also examined. Neonatal outcomes (NAS, preterm birth, low birthweight, infant mortality and admission to special care nursery) were compared using logistic regression. Infants born to currently or recently incarcerated women had higher odds of all adverse outcomes than infants in the nonexposed group. Infants born to women incarcerated during the second or third trimester (but not the month of birth) had poorer outcomes than infants born to women incarcerated during the month of birth. The findings show that babies born to currently or formerly incarcerated women are equally likely to experience adverse neonatal outcomes. Enhanced maternal healthcare must be provided during incarceration and after release.