The study also found smokers' placentas had compromised DNA repair mechanisms, and reduced expression of at least three proteins key to foetal nourishment and growth.
However, there was some good news - the study found the level of DNA damage in the placentas of the 34 women who quit while pregnant was similar to that of non-smokers.
Dr Slatter said that reinforced the messages that pregnant smokers could still reduce their chances of complications - and potentially give their child a better start - if they quit.
"Of course, it is vastly preferable to be a non-smoker during pregnancy, but this research highlights that it is still better to quit late than never."
Quitline principal advisor Phyllis Watson, a clinical psychologist, said the research would help pregnant smokers kick the habit.
"We found that if you can provide detailed knowledge, such as the placenta or the DNA gets damaged ... it actually helps them to be motivated to quit for the health of their baby."
The study's finding on the benefits of quitting, even later in pregnancy, would be a "great motivator", she said
Ms Watson said women were aware that smoking could cause miscarriages, respiratory problems and sudden infant death, but myths about smoking were often barriers to quitting.
Most pregnant women who contacted Quitline had cut down but were still smoking. It was often their first serious attempt at quitting.
About 2 per cent of all women who use Quitline each year are pregnant - or an average of 40 women a month.
Quitline said that was too low, which was why it had developed a special pregnancy service, new television ads and a referral process with the College of Midwives.
The special pregnancy programme runs until at least six weeks after the baby is born and includes more intensive follow-up support.
"Since these initiatives began, we have seen a big increase in the numbers of pregnant women contact us and we expect that to continue to rise."
The Otago University research will be published in the international journal Human Pathology next month.
Researchers also found evidence of impaired placental cell function through reduced expression of at least three proteins key to foetal nourishment and growth.
DNA repair mechanisms in placental cells showed signs of being compromised in the smoking group.
Dr Slatter said previous research had identified another type of placental DNA damage in smokers, known as DNA adducts, but her team is the first to show that double-strand breaks also occur.
DNA damage levels in the placentas of 34 women in the study who had been smoke-free for more than four weeks before giving birth were found to be similar to that of non-smokers and their DNA repair mechanisms appeared to be working properly once more.
"This finding reinforces the message that women who are smoking in pregnancy can still reduce their chances of complications-and potentially give their child a better start- if they quit," Dr Slatter said.
"Of course, it is vastly preferable to be a non-smoker during pregnancy, but this research highlights that it is still better to quit late than never."
