Abstract Background Borderline personality disorder (BPD) is a high prevalence and serious mental health disorder that has historically challenged the finite resources of health services. Despite empirical evidence supporting structured psychological therapy as the first line of treatment, there remains significant barriers in providing timely access to evidence-based treatment for this population. The primary aim of this study is to evaluate the effectiveness of providing a stepped-care structured psychological group treatment to individuals with BPD within local mental health services. The secondary aims of the study are to identify the variables that predict the need to step up or down in care and the effectiveness of treatment on psychosocial functioning. Methods Participants seeking treatment at two community mental health services will be invited to participate. Randomised controlled trial assignment will be to either (i) group skills treatment or (ii) treatment as usual. Group treatment will be offered via a stepped-care pathway with participants initially attending a 12-week group with the option of a subsequent 16-week group. The criteria for inclusion in continuing treatment includes meeting > 4 BPD diagnostic criteria or severity on GAF (< 65) at the completion of the 12-week group. Data will be collected at baseline and at five follow-up time points over a 12-month period. Discussion This pragmatic trial will provide valuable information regarding the effectiveness of a progressive stepped-care group treatment for individuals with BPD in the real-world setting of a community mental health service. It will further the current understanding of variables that predict treatment dose and duration. Trial registration Australian New Zealand Clinical Trials Registry ACTRN12618000477224. Registered on 3 April 2018