BACKGROUND: We report a cluster-randomised trial of a home-based counselling strategy, designed for large-scale implementation, in a population of 1.2 million people in rural southern Tanzania. We hypothesised that the strategy would improve neonatal survival by around 15%. METHODS AND FINDINGS: In 2010 we trained 824 female volunteers to make three home visits to women and their families during pregnancy and two visits to them in the first few days of the infant's life in 65 wards, selected randomly from all 132 wards in six districts in Mtwara and Lindi regions, constituting typical rural areas in Southern Tanzania. The remaining wards were comparison areas. Participants were not blinded to the intervention. The primary analysis was an intention-to-treat analysis comparing the neonatal mortality (day 0-27) per 1,000 live births in intervention and comparison wards based on a representative survey in 185,000 households in 2013 with a response rate of 90%. We included 24,381 and 23,307 live births between July 2010 and June 2013 and 7,823 and 7,555 live births in the last year in intervention and comparison wards, respectively. We also compared changes in neonatal mortality and newborn care practices in intervention and comparison wards using baseline census data from 2007 including 225,000 households and 22,243 births in five of the six intervention districts. Amongst the 7,823 women with a live birth in the year prior to survey in intervention wards, 59% and 41% received at least one volunteer visit during pregnancy and postpartum, respectively. Neonatal mortality reduced from 35.0 to 30.5 deaths per 1,000 live births between 2007 and 2013 in the five districts, respectively. There was no evidence of an impact of the intervention on neonatal survival (odds ratio [OR] 1.1, 95% confidence interval [CI] 0.9-1.2, p = 0.339). Newborn care practices reported by mothers were better in intervention than in comparison wards, including immediate breastfeeding (42% of 7,287 versus 35% of 7,008, OR 1.4, CI 1.3-1.6, p < 0.001), feeding only breast milk for the first 3 d (90% of 7,557 versus 79% of 7,307, OR 2.2, 95% CI 1.8-2.7, p < 0.001), and clean hands for home delivery (92% of 1,351 versus 88% of 1,799, OR 1.5, 95% CI 1.0-2.3, p = 0.033). Facility delivery improved dramatically in both groups from 41% of 22,243 in 2007 and was 82% of 7,820 versus 75% of 7,553 (OR 1.5, 95% CI 1.2-2.0, p = 0.002) in intervention and comparison wards in 2013. Methodological limitations include our inability to rule out some degree of leakage of the intervention into the comparison areas and response bias for newborn care behaviours. CONCLUSION: Neonatal mortality remained high despite better care practices and childbirth in facilities becoming common. Public health action to improve neonatal survival in this setting should include a focus on improving the quality of facility-based childbirth care. TRIAL REGISTRATION: ClinicalTrials.gov NCT01022788.