Fetal growth restriction in singletons has been shown to enhance fetal lung maturation and reduce the risk of respiratory distress syndrome due to increased endogenous steroid production. However, data on lung maturation in growth-discordant monochorionic (thus, identical) twins are lacking. Our objective was to compare the risk of severe neonatal morbidity between the larger and the smaller twin in monochorionic twins with birth weight discordance (BWD). We included in the study all consecutive monochorionic diamniotic pregnancies with severe BWD (≥25%) and two live-born twins delivered at our center (n = 47 twin pairs). We compared the incidence of neonatal morbidity, particularly respiratory distress syndrome (RDS), and cerebral lesions between the larger and the smaller co-twin. The incidence of severe neonatal morbidity in the larger and smaller twin was 38% (18/47) and 19% (9/47), respectively (odds ratio (OR) 2.66, 95% confidence interval (CI) 0.94–7.44) and was due primarily to the higher incidence of RDS, 32% (15/47) and 6% (3/47), respectively (OR 6.88, 95% CI 1.66–32.83). In conclusion, this study shows that the larger twin in monochorionic twin pairs with BWD is at increased risk of severe neonatal morbidity, particularly RDS, compared to the smaller twin.