Key Message: Among SARS-CoV-2-infected mothers, vaginal delivery rates were high and associated with favorable outcomes with no cases of neonatal COVID-19. Purpose: To investigate the mode of delivery and its impact on immediate neonatal outcome in SARS-CoV-2-infected women. Methods: A prospective study following pregnant women diagnosed with COVID-19 who delivered between March 15th and July 4th in seven university affiliated hospitals in Israel. Results: A total of 52 women with a confirmed diagnosis of COVID-19 delivered in the participating centers during the study period. The median gestational age at the time of delivery was 38 weeks, with 16 (30.8%) cases complicated by spontaneous preterm birth. Forty-three women (82.7%) underwent a trial of labor. The remaining 9 women underwent pre-labor cesarean delivery mostly due to obstetric indications, whereas one woman with a critical COVID-19 course underwent urgent cesarean delivery due to maternal deterioration. Among those who underwent a trial of labor (n = 43), 39 (90.7%) delivered vaginally, whereas 4 (9.3%) cases resulted in cesarean delivery. Neonatal RT-PCR nasopharyngeal swabs tested negative in all cases, and none of the infants developed pneumonia. No maternal and neonatal deaths were encountered. Conclusions: In this prospective study among SARS-CoV-2-infected mothers, vaginal delivery rates were high and associated with favorable outcomes with no cases of neonatal COVID-19. Our findings underscore that delivery management among SARS-CoV-2-infected mothers should be based on obstetric indications and may potentially reduce the high rates of cesarean delivery previously reported in this setting.