Background In women with gestational diabetes mellitus, it is not clear whether routine induction of labor at <40 weeks of gestation is beneficial to mother and newborn infant. Objective The purpose of this study was to compare outcomes among women with gestational diabetes mellitus who had induction of labor at either 38 or 39 weeks with those whose pregnancy was managed expectantly. Study Design We included all women in Ontario, Canada, with diagnosed gestational diabetes mellitus who had a singleton hospital birth at ≥38 + 0 weeks of gestation between April 2012 and March 2014. Data were obtained from the Better Outcomes Registry & Network Ontario, which is a province-wide registry of all births in Ontario, Canada. Women who underwent induction of labor at 38 + 0 to 38 + 6 weeks of gestation (38-IOL; n = 1188) were compared with those who remained undelivered until 39 + 0 weeks of gestation (38-Expectant; n = 5229). Separately, those women who underwent induction of labor at 39 + 0 to 39 + 6 weeks of gestation (39-IOL; n = 1036) were compared with women who remained undelivered until 40 + 0 weeks of gestation (39-Expectant; n = 2162). Odds ratios and 95% confidence intervals were adjusted for maternal age, parity, insulin treatment, and prepregnancy body mass index. Results Of 281,480 women who gave birth during the study period, 14,600 women (5.2%) had gestational diabetes mellitus; of these, 8392 women (57.5%) met all inclusion criteria. Compared with the 38-Expectant group, those women in the 38-IOL group had lower odds for cesarean delivery (adjusted odds ratio, 0.73; 95% confidence interval, 0.52-0.90), higher odds for neonatal intensive care unit admission (adjusted odds ratio, 1.36; 95% confidence interval, 1.09-1.69), and no difference in other maternal-newborn infant outcomes. Compared with the 39-Expectant group, women in the 39-IOL group likewise had lower odds for cesarean delivery (adjusted odds ratio, 0.73; 95% confidence interval, 0.58-0.93) but no difference in neonatal intensive care unit admission (adjusted odds ratio, 0.83; 95% confidence interval, 0.61-1.11). Conclusion In women with gestational diabetes mellitus, the routine induction of labor at 38 or 39 weeks is associated with a lower risk of cesarean delivery compared with expectant management but may increase the risk of neonatal intensive care unit admission when done at <39 weeks of gestation.