OBJECTIVE To examine the clinical effectiveness and cost-effectiveness of referral to group art therapy plus standard care, compared with referral to an activity group plus standard care and standard care alone, among people with schizophrenia. DESIGN A three-arm, parallel group, single-blind, pragmatic, randomised controlled trial. Participants were randomised via an independent and remote telephone randomisation service using permuted blocks, stratified by study centre. SETTING Study participants were recruited from secondary care mental health and social services in four UK centres. PARTICIPANTS Potential participants were aged 18 years or over, had a clinical diagnosis of schizophrenia, confirmed by an examination of case notes, and provided written informed consent. We excluded those who were unable to speak sufficient English to complete the baseline assessment, those with severe cognitive impairment and those already receiving arts therapy. INTERVENTIONS Group art therapy was delivered by registered art therapists according to nationally agreed standards. Groups had up to eight members, lasted for 90 minutes and ran for 12 months. Members were given access to a range of art materials and encouraged to use these to express themselves freely. Activity groups were designed to control for the non-specific effects of group art therapy. Group facilitators offered various activities and encouraged participants to collectively select those they wanted to pursue. Standard care involved follow-up from secondary care mental health services and the option of referral to other services, except arts therapies, as required. MAIN OUTCOME MEASURES Our co-primary outcomes were global functioning (measured using the Global Assessment of Functioning Scale - GAF) and mental health symptoms (measured using the Positive and Negative Syndrome Scale - PANSS) at 24 months. The main secondary outcomes were level of group attendance, social functioning, well-being, health-related quality of life, service utilisation and other costs measured 12 and 24 months after randomisation. RESULTS Four hundred and seventeen people were recruited, of whom 355 (85%) were followed up at 2 years. Eighty-six (61%) of those randomised to art therapy and 73 (52%) of those randomised to activity groups attended at least one group. No differences in primary outcomes were found between the three study arms. The adjusted mean difference between art therapy and standard care at 24 months was -0.9 [95% confidence interval (CI) -3.8 to 2.1] on the GAF Scale and 0.7 (95% CI -3.1 to 4.6) on the PANSS Scale. Differences in secondary outcomes were not found, except that those referred to an activity group had fewer positive symptoms of schizophrenia at 24 months than those randomised to art therapy. Secondary analysis indicated that attendance at art therapy groups was not associated with improvements in global functioning or mental health. Although the total cost of the art therapy group was lower than the cost of the two comparison groups, referral to group art therapy did not appear to provide a cost-effective use of resources. CONCLUSIONS Referring people with established schizophrenia to group art therapy as delivered in this randomised trial does not appear to improve global functioning or mental health of patients or provide a more cost-effective use of resources than standard care alone. TRIAL REGISTRATION Current Controlled Trials ISRCTN 46150447. FUNDING This project was funded by the NIHR Health Technology Assessment programme and will be published in full in Health Technology Assessment; Vol. 16, No. 8. See the HTA programme website for further project information.