BACKGROUND: Prolonged acute hospital stays are a major problem for older people and for health services. Failure to effectively manage the psychological and social aspects of illness is an important cause of prolonged hospital stays. Proactive Psychological Medicine (PPM) is a new way of providing psychiatry services to medical wards. PPM is proactive, focussed, intensive and integrated with medical care. A major aim of PPM is to reduce the time older people spend in hospital because of unmanaged psychological and social problems. The HOME Study will test the effectiveness and cost-effectiveness of PPM. METHODS/DESIGN: A two-arm parallel-group randomised controlled superiority trial, with a linked health economic analysis and an embedded process evaluation, will be conducted at three sites. A total of 3588 participants will be recruited and randomised to usual care or usual care plus PPM. The primary outcome is the number of days spent as an inpatient in a general hospital in the month (30 days) post-randomisation. Secondary outcomes for each participant (measured at 1 and 3 months) include quality of life, independent functioning, symptoms of anxiety and depression, cognitive function, and their experience of the hospital stay. DISCUSSION: The trial has been designed to produce findings that are generalisable to all older medical inpatients (including those with cognitive impairment). It will provide information on the effectiveness and cost-effectiveness of PPM, which we hope will be of value to patients, clinicians, managers and service planners. TRIAL REGISTRATION: ISRCTN86120296 . Registered on 3 January 2018.