Background Efforts to reduce the burden of illness and personal suffering associated with depression in older adults have focused on those with more severe depressive syndromes. Less attention has been paid to those with mild disorders/subthreshold depression, but these patients also suffer significant impairments in their quality of life and level of functioning. There is currently no clear evidence-based guidance regarding treatment for this patient group. Objectives To establish the clinical effectiveness and cost-effectiveness of a low-intensity intervention of collaborative care for primary care older adults who screened positive for subthreshold depression. Design A pragmatic, multicentred, two-arm, parallel, individually randomised controlled trial with a qualitative study embedded within the pilot. Randomisation occurred after informed consent and baseline measures were collected. Setting Thirty-two general practitioner (GP) practices in the north of England. Participants A total of 705 participants aged ≥ 75 years during the pilot phase and ≥ 65 years during the main trial with subthreshold depression. Interventions Participants in the intervention group received a low-intensity intervention of collaborative care, which included behavioural activation delivered by a case manager for an average of six sessions over 7–8 weeks, alongside usual GP care. Control-arm participants received only usual GP care. Main outcome measures The primary outcome measure was a self-reported measure of depression severity, the Patient Health Questionnaire-9 items PHQ-9 score at 4 months post randomisation. Secondary outcome measures included the European Quality of Life-5 Dimensions, Short Form questionnaire-12 items, Patient Health Questionnaire-15 items, Generalised Anxiety Disorder seven-item scale, Connor–Davidson Resilience Scale two-item version, a medication questionnaire and objective data. Participants were followed up for 12 months. Results In total, 705 participants were randomised (collaborative care n = 344, usual care n = 361), with 586 participants (83%; collaborative care 76%, usual care 90%) followed up at 4 months and 519 participants (74%; collaborative care 68%, usual care 79%) followed up at 12 months. Attrition was markedly greater in the collaborative care arm. Model estimates at the primary end point of 4 months revealed a statistically significant effect in favour of collaborative care compared with usual care [mean difference 1.31 score points, 95% confidence interval (CI) 0.67 to 1.95 score points; p < 0.001]. The difference equates to a standard effect size of 0.30, for which the trial was powered. Treatment differences measured by the PHQ-9 were maintained at 12 months’ follow-up (mean difference 1.33 score points, 95% CI 0.55 to 2.10 score points; p = 0.001). Base-case cost-effectiveness analysis found that the incremental cost-effectiveness ratio was £9633 per quality-adjusted life-year (QALY). On average, participants allocated to collaborative care displayed significantly higher QALYs than those allocated to the control group (annual difference in adjusted QALYs of 0.044, 95% bias-corrected CI 0.015 to 0.072; p = 0.003). Conclusions Collaborative care has been shown to be clinically effective and cost-effective for older adults with subthreshold depression and to reduce the proportion of people who go on to develop case-level depression at 12 months. This intervention could feasibly be delivered in the NHS at an acceptable cost–benefit ratio. Important future work would include investigating the longer-term effect of collaborative care on the CASPER population, which could be conducted by introducing an extension to follow-up, and investigating the impact of collaborative care on managing multimorbidities in people with subthreshold depression. Trial registration Current Controlled Trials ISRCTN02202951. Funding This project was funded by the National Institute for Health Research (NIHR) Health Technology Assessment programme and will be published in full in Health Technology Assessment; Vol. 21, No. 8. See the NIHR Journals Library website for further project information.