Pulmonary rehabilitation is widely advocated for people with chronic obstructive pulmonary disease (COPD) to improve exercise capacity, symptoms and quality of life, however only a minority of individuals with COPD are able to participate. Travel and transport are frequently cited as barriers to uptake of centre-based programs. Other models of pulmonary rehabilitation, including home-based programs, have been proposed in order to improve access to this important treatment. Previous studies of home-based pulmonary rehabilitation in COPD have demonstrated improvement in exercise capacity and quality of life, but not all elements of the program were conducted in the home environment. It is uncertain whether a pulmonary rehabilitation program delivered in its entirety at home is cost effective and equally capable of producing benefits in exercise capacity, symptoms and quality of life as a hospital-based program. The aim of this study is to compare the costs and benefits of home-based and hospital-based pulmonary rehabilitation for people with COPD.This randomised, controlled, equivalence trial conducted at two centres will recruit 166 individuals with spirometrically confirmed COPD. Participants will be randomly allocated to hospital-based or home-based pulmonary rehabilitation. Hospital programs will follow the traditional outpatient model consisting of twice weekly supervised exercise training and education for eight weeks. Home-based programs will involve one home visit followed by seven weekly telephone calls, using a motivational interviewing approach to enhance exercise participation and facilitate self management. The primary outcome is change in 6-minute walk distance immediately following intervention. Measurements of exercise capacity, physical activity, symptoms and quality of life will be taken at baseline, immediately following the intervention and at 12 months, by a blinded assessor. Completion rates will be compared between programs. Direct healthcare costs and indirect (patient-related) costs will be measured to compare the cost-effectiveness of each program.This trial will identify whether home-based pulmonary rehabilitation can deliver equivalent benefits to centre-based pulmonary rehabilitation in a cost effective manner. The results of this study will contribute new knowledge regarding alternative models of pulmonary rehabilitation and will inform pulmonary rehabilitation guidelines for COPD.