OBJECTIVES: To determine whether a community-delivered intervention targeting infant sleep problems improves infant sleep and maternal well-being and to report the costs of this approach to the healthcare system. DESIGN: Cluster randomised trial. SETTING: 49 Maternal and Child Health (MCH) centres (clusters) in Melbourne, Australia. PARTICIPANTS: 328 mothers reporting an infant sleep problem at 7 months recruited during October-November 2003. INTERVENTION: Behavioural strategies delivered over individual structured MCH consultations versus usual care. MAIN OUTCOME MEASURES: Maternal report of infant sleep problem, depression symptoms (Edinburgh Postnatal Depression Scale (EPDS)), and SF-12 mental and physical health scores when infants were 10 and 12 months old. Costs included MCH sleep consultations, other healthcare services and intervention costs. RESULTS: Prevalence of infant sleep problems was lower in the intervention than control group at 10 months (56% vs 68%; adjusted OR 0.58 (95% CI: 0.36 to 0.94)) and 12 months (39% vs 55%; adjusted OR 0.50 (0.31 to 0.80)). EPDS scores indicated less depression at 10 months (adjusted mean difference -1.4 (-2.3 to -0.4) and 12 months (-1.7 (-2.6 to -0.7)). SF-12 mental health scores indicated better health at 10 months (adjusted mean difference 3.7 (1.5 to 5.8)) and 12 months (3.9 (1.8 to 6.1)). Total mean costs including intervention design, delivery and use of non-MCH nurse services were 96.93 pounds sterling and 116.79 pounds sterling per intervention and control family, respectively. CONCLUSIONS: Implementing this sleep intervention may lead to health gains for infants and mothers and resource savings for the healthcare system. TRIAL REGISTRATION: Current Controlled Trial Registry, number ISRCTN48752250 [controlled-trials.com] (registered November 2004).