Coal and oil power plant retirements reduce air pollution nearby, but few studies have leveraged these natural experiments for public health research. We used California Department of Public Health birth records and US Energy Information Administration data from 2001-2011 to evaluate the relationship between the retirements of 8 coal and oil power plants and nearby preterm (gestational age of <37 weeks) birth. We conducted a difference-in-differences analysis using adjusted linear mixed models that included 57,005 births-6.3% of which were preterm-to compare the probability of preterm birth before and after power plant retirement among mothers residing within 0-5 km and 5-10 km of the 8 power plants. We found that power plant retirements were associated with a decrease in the proportion of preterm birth within 5 km (-0.019, 95% CI: -0.031, -0.008) and 5-10 km (-0.015, 95% CI: -0.024, -0.007), controlling for secular trends with mothers living 10-20 km away. For the 0-5-km area, this corresponds to a reduction in preterm birth from 7.0% to 5.1%. Subgroup analyses indicated a potentially larger association among non-Hispanic black and Asian mothers than among non-Hispanic white and Hispanic mothers and no differences in educational attainment. Future coal and oil power plant retirements may reduce preterm birth among nearby populations.