An unannounced inspection by the CQC in March was prompted following concerns over the quality of services being given to mothers and babies.
The service was also rated inadequate for being safe and well-led, according to the regulator.
Findings from the inspection included a lack of effective systems to ensure staff had the skills, competence, knowledge and experience to safely care for women and their babies.
The trust did not have effective systems in place for managing and responding to patient risk in line with national guidance.
Staff did not always complete and update risk assessments for each patient and patient safety incidents were not always managed well, the CQC added.
Sarah Dronsfield, CQC’s head of hospital inspection, said: “When we visited maternity services in the Jessop Wing at Sheffield Teaching Hospitals NHS Foundation Trust, inspectors found a service that was not providing the standard of care women should be able to expect.
“Our findings were such that the ratings for maternity services across the trust have moved from outstanding to inadequate.”
Ms Dronsfield added that some areas of good practice had been found, such as staff wellbeing, equality and diversity, and that an action plan had been provided.
“We continue to monitor the trust extremely closely and expect them to continue to make rapid improvements,” she said.
“The trust leadership team know what they must do to improve patient safety and we will re-inspect to ensure this happens, taking further action if needed to protect patients.”
Following the CQC’s decision, Sheffield Teaching Hospitals’ chief executive and chief nurse assured women coming to the Jessop Wing that they will continue to receive safe, good care.
They said the inspection was only of maternity care services and did not cover the neonatal unit, gynaecology, or Jessops fertility services.
Kirsten Major, chief executive of the trust, said: “Our maternity teams work incredibly hard every day to ensure their care is always the number one priority.
“Whilst we are exceptionally disappointed with the findings of the CQC report, we welcome the external scrutiny and have wasted no time in responding to the actions which have been identified as necessary.
“Many of the actions have been completed in the three months since the inspection took place.”
Professor Chris Morley, chief nurse at the trust, said: “The teams in the Jessop Wing are responding to this report with the commitment and professionalism we see every day and are completely focused on continuing to deliver safe, good care to women and their babies.
“If any women or their partners have concerns following this inspection, then please do not hesitate to contact us and the team will be happy to provide assurance.”