BACKGROUND: If effective, less intensive treatments for people with personality disorder have the potential to serve more people. OBJECTIVES: To compare the clinical effectiveness and cost-effectiveness of psychoeducation with problem-solving (PEPS) therapy plus usual treatment against usual treatment alone in improving social problem-solving with adults with personality disorder. DESIGN: Multisite two-arm, parallel-group, pragmatic randomised controlled superiority trial. SETTING: Community mental health services in three NHS trusts in England and Wales. PARTICIPANTS: Community-dwelling adults with any personality disorder recruited from community mental health services. INTERVENTIONS: Up to four individual sessions of psychoeducation, a collaborative dialogue about personality disorder, followed by 12 group sessions of problem-solving therapy to help participants learn a process for solving interpersonal problems. MAIN OUTCOME MEASURES: The primary outcome was measured by the Social Functioning Questionnaire (SFQ). Secondary outcomes were service use (general practitioner records), mood (measured via the Hospital Anxiety and Depression Scale) and client-specified three main problems rated by severity. We studied the mechanism of change using the Social Problem-Solving Inventory. Costs were identified using the Client Service Receipt Inventory and quality of life was identified by the European Quality of Life-5 Dimensions questionnaire. Research assistants blinded to treatment allocation collected follow-up information. RESULTS: There were 739 people referred for the trial and 444 were eligible. More adverse events in the PEPS arm led to a halt to recruitment after 306 people were randomised (90% of planned sample size); 154 participants received PEPS and 152 received usual treatment. The mean age was 38 years and 67% were women. Follow-up at 72 weeks after randomisation was completed for 62% of participants in the usual-treatment arm and 73% in the PEPS arm. Intention-to-treat analyses compared individuals as randomised, regardless of treatment received or availability of 72-week follow-up SFQ data. Median attendance at psychoeducation sessions was approximately 90% and for problem-solving sessions was approximately 50%. PEPS therapy plus usual treatment was no more effective than usual treatment alone for the primary outcome [adjusted difference in means for SFQ -0.73 points, 95% confidence interval (CI) -1.83 to 0.38 points; p = 0.19], any of the secondary outcomes or social problem-solving. Over the follow-up, PEPS costs were, on average, £182 less than for usual treatment. It also resulted in 0.0148 more quality-adjusted life-years. Neither difference was statistically significant. At the National Institute for Health and Care Excellence thresholds, the intervention had a 64% likelihood of being the more cost-effective option. More adverse events, mainly incidents of self-harm, occurred in the PEPS arm, but the difference was not significant (adjusted incidence rate ratio 1.24, 95% CI 0.93 to 1.64). LIMITATIONS: There was possible bias in adverse event recording because of dependence on self-disclosure or reporting by the clinical team. Non-completion of problem-solving sessions and non-standardisation of usual treatment were limitations. CONCLUSIONS: We found no evidence to support the use of PEPS therapy alongside standard care for improving social functioning of adults with personality disorder living in the community. FUTURE WORK: We aim to investigate adverse events by accessing centrally held NHS data on deaths and hospitalisation for all PEPS trial participants. TRIAL REGISTRATION: Current Controlled Trials ISRCTN70660936. FUNDING: This project was funded by the National Institute for Health Research (NIHR) Health Technology Assessment programme and will be published in full in Health Technology Assessment; Vol. 20, No. 52. See the NIHR Journals Library website for further project information.