This article presents the results of an evaluation of the free delivery and caesarean policy (FDCP) in Senegal. The policy was introduced into five poor regions in 2005 and in 2006 was extended at regional hospital level to all regions apart from the capital (Dakar). The evaluation was carried out in 2006-7. There were four research components, all focused on selected facilities and districts within the five FDCP regions: a financial analysis of expenditure on the policy and wider health financing in the five regions and nationally; 54 key informant interviews from national down to facility level; 10 focus group discussions and 8 in-depth interviews; and analysis based on clinical record extraction of 761 major obstetric interventions. The evaluation found significant implementation difficulties, especially related to the allocation of funds and kits and the adequacy of their contents. Despite that, significant increases in utilization in normal deliveries (from 40% to 44% of expected deliveries in FDCP areas over 2004-5) and in caesarean rates (rising from 4.2% to 5.6% in FDCP areas) were recorded. National data suggested that these trends were not found in non-FDCP regions. Using the evaluation data, the cost per additional caesarean under the policy was US$467 and the cost per additional supervised normal delivery was US$21. The article concludes that, in order to achieve its full potential, the FDCP requires improved systems for planning and allocating resources, and new channels to reimburse lower level facilities. It is also important that all complicated deliveries (not just caesareans) are included in the package. In the case of Senegal, a complementary strategy of investment in facilities, transportation and staffing is required to bring greater geographical access and upgrade services. These findings are likely to be relevant to other countries currently experimenting with similar approaches to reducing financial barriers to skilled attendance at delivery.