BACKGROUND: Observational evidence suggests that community-based services for people with schizophrenia can be successfully provided by community health workers, when supervised by specialists, in low-income and middle-income countries. We did the COmmunity care for People with Schizophrenia in India (COPSI) trial to compare the effectiveness of a collaborative community-based care intervention with standard facility-based care. METHODS: We did a multicentre, parallel-group, randomised controlled trial at three sites in India between Jan 1, 2009 and Dec 31, 2010. Patients aged 16-60 years with a primary diagnosis of schizophrenia according to the tenth edition of the International Classification of Diseases, Diagnostic Criteria for Research (ICD-10-DCR) were randomly assigned (2:1), via a computer-generated randomisation list with block sizes of three, six, or nine, to receive either collaborative community-based care plus facility-based care or facility-based care alone. Randomisation was stratified by study site. Outcome assessors were masked to group allocation. The primary outcome was a change in symptoms and disabilities over 12 months, as measured by the positive and negative syndrome scale (PANSS) and the Indian disability evaluation and assessment scale (IDEAS). Analysis was by modified intention to treat. This study is registered as an International Standard Randomised Controlled Trial, number ISRCTN 56877013. FINDINGS: 187 participants were randomised to the collaborative community-based care plus facility-based care group and 95 were randomised to the facility-based care alone group; 253 (90%) participants completed follow-up to month 12. At 12 months, total PANSS and IDEAS scores were lower in patients in the intervention group than in those in the control group (PANSS adjusted mean difference -3.75, 95% CI -7.92 to 0.42; p=0.08; IDEAS -0.95, -1.68 to -0.23; p=0.01). However, no difference was shown in the proportion of participants who had a reduction of more than 20% in overall symptoms (PANSS 85 [51%] in the intervention group vs 44 [51%] in the control group; p=0.89; IDEAS 75 [48%] vs 28 [35%]). We noted a significant reduction in symptom and disability outcomes at the rural Tamil Nadu site (-9.29, -15.41 to -3.17; p=0.003). Two patients (one in each group) died by suicide during the study, and two patients died because of complications of a road traffic accident and pre-existing cardiac disease. 18 (73%) patients (17 in the intervention group) were admitted to hospital during the course of the trial, of whom seven were admitted because of physical health problems, such as acute gastritis and vomiting, road accident, high fever, or cardiovascular disease. INTERPRETATION: The collaborative community-based care plus facility-based care intervention is modestly more effective than facility-based care, especially for reducing disability and symptoms of psychosis. Our results show that the study intervention is best implemented as an initial service in settings where services are scarce, for example in rural areas. FUNDING: Wellcome Trust.