Objective To compare the effectiveness of the Cavaterm thermal balloon endometrial ablation system with the Nd:YAG laser for the treatment of dysfunctional uterine bleeding. Design Randomised controlled trial.Setting Minimal access gynaecological surgery unit in a district general hospital.Population Seventy-two women with dysfunctional uterine bleeding requesting conservative surgical management of their condition. Methods Women with a normal endometrial biopsy and normal uterine cavity were randomly allocated to endometrial ablation by Cavaterm or Nd:YAG laser. Patients completed pre-operative and 6-and 12-month post-operative questionnaires assessing menstrual symptoms, quality of life, sexual activity and procedural satisfaction and acceptability. All patients received a single dose of gonadotropin-releasing hormone analogue one month pre-operatively and kept blinded to the procedure performed until after the 6-month assessment. Main outcome measures The primary outcome measure was amenorrhoea rate. Secondary outcomes were effect on blood loss, quality of life, sexual activity, patient satisfaction and procedure acceptability. Results Seventy-two women were randomised. Amenorrhoea rates at 12 months in the Cavaterm and endometrial laser ablation groups were 29% vs 39% ( P ¼ 0.286), with combined amenorrhoea and hypomenorrhoea rates of 73% vs 69%, respectively. At 12 months, repeat surgery rates were higher in the endometrial laser ablation group (15% vs 12%, P ¼ 0.395). Cavaterm was an acceptable procedure and 93% of patients satisfied or very satisfied at 12 months (95% endometrial laser ablation). Both treatments were associated with an increase from baseline in the SF-12 physical score (Cavaterm mean difference À3.9, 95% CI À7.9, 0.2, ns; endometrial laser ablation mean difference À5.1, 95% CI À9.5, À0.7, P ¼ 0.003) and mental health score (Cavaterm mean difference À5.6, 95% CI À9.9, À1.3, P ¼ 0.001; endometrial laser ablation mean difference À5.9, 95% CI À11.7, À0.2, P ¼ 0.04). Patient's own assessment of health (EQ-5D VAS) improved from baseline in both groups (Cavaterm mean difference À7.6, 95% CI À13.9, À1.3, P ¼ 0.02; endometrial laser ablation mean difference À5.4, 95% CI À14.9, 4.2, ns). EQ-5D index scores also improved (Cavaterm mean difference À0.06, 95% CI À0.2, 0.005, ns; endometrial laser ablation mean difference À0.17, 95% CI À0.3, À0.02, P ¼ 0.02). There were no major complications in either group. Conclusions The results with the Cavaterm thermal balloon endometrial ablation system are as good as those obtained with the Nd:YAG laser when used for the treatment of dysfunctional uterine bleeding in the short term. It results in a significant reduction in menstrual blood loss, patient satisfaction and improvement in patient quality of life. Larger studies with longer follow up are required to determine its place in the modern treatment of dysfunctional uterine bleeding.