Objective Workforce issues constrain obstetric care services in rural US hospitals, and one strategy hospitals use is to employ physicians to provide obstetric care. However, little is known about the relationship between hospital employment of maternity care physicians and use of obstetric care procedures in rural hospitals. We examined the association between obstetric physician employment and use of cesareans and nonindicated labor induction. Study Design We conducted a cross‐sectional analysis of a telephone survey of all 306 rural hospitals providing obstetric care in 9 states from November 2013 to March 2014 and linked the survey data (N = 263, 86% response rate) to all‐payer childbirth data on maternity care utilization from 2013 Statewide Inpatient Database (SID) hospital discharge data. Methods Using logistic regression models, we assessed the proportion of a hospital's maternity care physicians employed by the hospital and estimated its association with utilization of low‐risk and nonindicated cesareans, and nonindicated labor induction. Results Rural hospitals that employed family physicians but not obstetricians had lower cesarean rates among low‐risk pregnancies. Rural hospitals that employed only obstetricians did not show a relationship between employment and procedure utilization. Across hospitals with both obstetricians and family physicians, a 10% higher proportion of obstetricians employed was associated with 4.6% higher low‐risk cesarean rates (4.6% [0.7%‐8.4%]), while no significant relationship was found for the proportion of family physicians employed by a hospital. Conclusions In rural US hospitals, associations between physician employment and obstetric procedure use differed by physician mix and the types of physicians employed.