Objective: To investigate the impact of industry funding on reporting of subgroup analyses in randomised controlled trials. Design: Systematic review. Data sources: Medline. Study selection: Randomised controlled trials published in 118 core clinical journals (defined by the National Library of Medicine) in 2007. 1140 study reports in a 1:1 ratio by high (five general medicine journals with largest number of total citations in 2007) versus lower impact journals, were randomly sampled. Two reviewers, independently and in duplicate, used standardised, piloted forms to screen study reports for eligibility and to extract data. They also used explicit criteria to determine whether a randomised controlled trial reported subgroup analyses. Logistic regression was used to examine the association of prespecified study characteristics with reporting versus not reporting of subgroup analyses. Results: 469 randomised controlled trials were included, of which 207 (44%) reported subgroup analyses. High impact journals (adjusted odds ratio 2.64, 95% confidence interval 1.62 to 4.33), non-surgical (versus surgical) trials (2.10, 1.26 to 3.50), and larger sample size (3.38, 1.64 to 6.99) were associated with more frequent reporting of subgroup analyses. The strength of association between trial funding and reporting of subgroups differed in trials with and without statistically significant primary outcomes (interaction P=0.02). In trials without statistically significant results for the primary outcome, industry funded trials were more likely to report subgroup analyses (2.29, 1.30 to 4.72) than non-industry funded trials. This was not true for trials with a statistically significant primary outcome (0.79, 0.46 to 1.36). Industry funded trials were associated with less frequent prespecification of subgroup hypotheses (31.3% v 38.0%, adjusted odds ratio 0.49, 0.26 to 0.94), and less use of the interaction test for analyses of subgroup effects (41.4% v 49.1%, 0.52, 0.28 to 0.97) than non-industry funded trials. Conclusion: Industry funded randomised controlled trials, in the absence of statistically significant primary outcomes, are more likely to report subgroup analyses than non-industry funded trials. Industry funded trials less frequently prespecify subgroup hypotheses and less frequently test for interaction than non-industry funded trials. Subgroup analyses from industry funded trials with negative results for the primary outcome should be viewed with caution.