Purpose Letrozole, though reported to be an effective ovulation inducing agent, warrants larger randomized trials. The purpose of this study is to compare the efficacy of letrozole with that of rFSH and clomiphene citrate(CC)/rFSH for ovarian stimulation in IUI cycles. Methods Randomized, prospective, single-blinded clinical trial. 1387 PCOS women after CC failure were randomized into three groups: Group A received letrozole, Group B received CC with two doses rFSH and Group C received continuous rFSH day 2 onwards until hCG injection. Results Group A, B and C had an ovulation rate of 79.30%, 56.95% and 89.89% and cycle cancellation rate of 20.70%, 43.05% and 10.11%, respectively. Pregnancy rates in Group A, B and C were 23.39%, 14.35% and 17.92%, while the miscarriage rates were 13.80%, 16.67% and 14.52%, respectively. Conclusion Letrozole appears to be a suitable ovulation inducing agent in PCOS women with CC failure and is found to be most effective when baseline estradiol level >60 pg/ml.