BACKGROUND: The World Health Organization predicts that by 2030 internalising problems (e.g. depression and anxiety) will be second only to HIV/AIDS in international burden of disease. Internalising problems affect 1 in 7 school aged children, impacting on peer relations, school engagement, and later mental health, relationships and employment. The development of early childhood prevention for internalising problems is in its infancy. The current study follows two successful 'efficacy' trials of a parenting group intervention to reduce internalising disorders in temperamentally inhibited preschool children. Cool Little Kids is a population-level randomised trial to determine the impacts of systematically screening preschoolers for inhibition then offering a parenting group intervention, on child internalising problems and economic costs at school entry. METHODS/DESIGN: This randomised trial will be conducted within the preschool service system, attended by more than 95% of Australian children in the year before starting school. In early 2011, preschool services in four local government areas in Melbourne, Australia, will distribute the screening tool. The ≈16% (n≈500) with temperamental inhibition will enter the trial. Intervention parents will be offered Cool Little Kids, a 6-session group program in the local community, focusing on ways to develop their child's bravery skills by reducing overprotective parenting interactions. Outcomes one and two years post-baseline will comprise child internalising diagnoses and symptoms, parenting interactions, and parent wellbeing. An economic evaluation (cost-consequences framework) will compare incremental differences in costs of the intervention versus control children to incremental differences in outcomes, from a societal perspective. Analyses will use the intention-to-treat principle, using logistic and linear regression models (binary and continuous outcomes respectively) to compare outcomes between the trial arms. DISCUSSION: This trial addresses gaps for internalising problems identified in the 2004 World Health Organization Prevention of Mental Disorders report. If effective and cost-effective, the intervention could readily be applied at a population level. Governments consider mental health to be a priority, enhancing the likelihood that an effective early prevention program would be adopted in Australia and internationally. RCH HUMAN RESEARCH ETHICS APPROVAL: 30105A.