In low-income countries, the coverage of institutional births is low. Using data from the two most recent Demographic and Health Surveys (1995-2001 and 2001-2006) for 25 low-income countries, this study examined trends in where women delivered their babies--public or private facilities or non-institutional settings. More than half of deliveries were in institutional settings in ten countries, mostly public facilities. In the other 15 countries, the majority of births were in women's homes, which was often their only option. Between the two survey periods, all five Asian countries studied (except Bangladesh) had an increase of 10-20 percentage points in institutional coverage, whereas none of the 19 sub-Saharan African countries saw an increase of more than 10 percentage points. More urban women and more in the richest (least poor) quintile gave birth in public or private facilities than rural and poorest quintile women. The rich-poor gap of institutional births was wider than the urban-rural gap. Inadequate public investment in health system infrastructure in rural areas and lack of skilled health professionals are major obstacles in reducing maternal mortality. Governments in low-income countries must invest more, especially in rural maternity services. Strengthening private, for-profit providers is not a policy choice for poor, rural communities.