Close consanguineous unions continue to be extremely common in much of West Asia, including Pakistan. However, the impact of inbreeding on offspring mortality, particularly perinatal mortality, remains poorly documented. This paper attempts to measure the mortality risks associated with consanguinity and inbreeding while controlling for the effects of other potential confounders. The study sample comprises a multi-ethnic population residing in selected squatter settlements of Karachi. The adjusted odds ratio for perinatal mortality in the offspring of women married to their first cousins was 2.0 [95% CI 1.5, 2.6]. When parental inbreeding was also taken into account, the adjusted odds ratio for perinatal mortality increased further. Analysis of a subsample of data limited to pregnancies to women aged 35 years or above (at the time of the survey) showed that, despite adjustment for important biological and socio-demographic factors, both consanguinity and inbreeding remained important predictors of perinatal mortality in the offspring. Implications of the present study for further research are highlighted.