Background 12 months of oral cyclophosphamide has been shown to alter the progression of scleroderma-related interstitial lung disease when compared with placebo. However, toxicity was a concern and without continued treatment the efficacy disappeared by 24 months. We hypothesised that a 2 year course of mycophenolate mofetil would be safer, better tolerated, and produce longer lasting improvements than cyclophosphamide. Methods This randomised, double-blind, parallel group trial enrolled patients from 14 US medical centres with scleroderma-related interstitial lung disease meeting defined dyspnoea, pulmonary function, and high-resolution CT (HRCT) criteria. The data coordinating centre at the University of California, Los Angeles (UCLA, CA, USA), randomly assigned patients using a double-blind, double-dummy, centre-blocked design to receive either mycophenolate mofetil (target dose 1500 mg twice daily) for 24 months or oral cyclophosphamide (target dose 2·0 mg/kg per day) for 12 months followed by placebo for 12 months. Drugs were given in matching 250 mg gel capsules. The primary endpoint, change in forced vital capacity as a percentage of the predicted normal value (FVC %) over the course of 24 months, was assessed in a modified intention-to-treat analysis using an inferential joint model combining a mixed-effects model for longitudinal outcomes and a survival model to handle non-ignorable missing data. The study was registered with ClinicalTrials.gov, number NCT00883129. Findings Between Sept 28, 2009, and Jan 14, 2013, 142 patients were randomly assigned to either mycophenolate mofetil (n=69) or cyclophosphamide (n=73). 126 patients (mycophenolate mofetil [n=63] and cyclophosphamide [n=63]) with acceptable baseline HRCT studies and at least one outcome measure were included in the primary analysis. The adjusted % predicted FVC improved from baseline to 24 months by 2·19 in the mycophenolate mofetil group (95% CI 0·53–3·84) and 2·88 in the cyclophosphamide group (1·19–4·58). The course of the % FVC did not differ significantly between the two treatment groups based on the prespecified primary analysis using a joint model (p=0·24), indicating that the trial was negative for the primary endpoint. However, in a post-hoc analysis of the primary endpoint, the within-treatment change from baseline to 24 months derived from the joint model showed that the % FVC improved significantly in both the mycophenolate mofetil and cyclophosphamide groups. 16 (11%) patients died (five [7%] mycophenolate mofetil and 11 [15%] cyclophosphamide), with most due to progressive interstitial lung disease. Leucopenia (30 patients vs four patients) and thrombocytopenia (four vs zero) occurred more often in patients given cyclophosphamide than mycophenolate mofetil. Fewer patients on mycophenolate mofetil than on cyclophosphamide prematurely withdrew from study drug (20 vs 32) or met prespecified criteria for treatment failure (zero vs two). The time to stopping treatment was shorter in the cyclophosphamide group (p=0·019). Interpretation Treatment of scleroderma-related interstitial lung disease with mycophenolate mofetil for 2 years or cyclophosphamide for 1 year both resulted in significant improvements in prespecified measures of lung function over the 2 year course of the study. Although mycophenolate mofetil was better tolerated and associated with less toxicity, the hypothesis that it would have greater efficacy at 24 months than cyclophosphamide was not confirmed. These findings support the potential clinical effectiveness of both cyclophosphamide and mycophenolate mofetil for progressive scleroderma-related interstitial lung disease, and the present preference for mycophenolate mofetil because of its better tolerability and toxicity profile. Funding National Heart, Lung and Blood Institute, National Institutes of Health; with drug supply provided by Hoffmann-La Roche and Genentech.