Background Schools increasingly prioritize social-emotional competence and bullying and cyberbullying prevention, so the development of novel, low-cost, and high-yield programs addressing these topics is important. Further, rigorous assessment of interventions prior to widespread dissemination is crucial. Objective This study assesses the effectiveness and implementation fidelity of the ACT Out! Social Issue Theater program, a 1-hour psychodramatic intervention by professional actors; it also measures students’ receptiveness to the intervention. Methods This study is a 2-arm cluster randomized control trial with 1:1 allocation that randomized either to the ACT Out! intervention or control (treatment as usual) at the classroom level (n=76 classrooms in 12 schools across 5 counties in Indiana, comprised of 1571 students at pretest in fourth, seventh, and tenth grades). The primary outcomes were self-reported social-emotional competence, bullying perpetration, and bullying victimization; the secondary outcomes were receptiveness to the intervention, implementation fidelity (independent observer observation), and prespecified subanalyses of social-emotional competence for seventh- and tenth-grade students. All outcomes were collected at baseline and 2-week posttest, with planned 3-months posttest data collection prevented due to the COVID-19 pandemic. Results Intervention fidelity was uniformly excellent (>96% adherence), and students were highly receptive to the program. However, trial results did not support the hypothesis that the intervention would increase participants’ social-emotional competence. The intervention’s impact on bullying was complicated to interpret and included some evidence of small interaction effects (reduced cyberbullying victimization and increased physical bullying perpetration). Additionally, pooled within-group reductions were also observed and discussed but were not appropriate for causal attribution. Conclusions This study found no superiority for a 1-hour ACT Out! intervention compared to treatment as usual for social-emotional competence or offline bullying, but some evidence of a small effect for cyberbullying. On the basis of these results and the within-group effects, as a next step, we encourage research into whether the ACT Out! intervention may engender a bystander effect not amenable to randomization by classroom. Therefore, we recommend a larger trial of the ACT Out! intervention that focuses specifically on cyberbullying, measures bystander behavior, is randomized by school, and is controlled for extant bullying prevention efforts at each school. Trial Registration Clinicaltrials.gov NCT04097496; https://clinicaltrials.gov/ct2/show/NCT04097496 International Registered Report Identifier (IRRID) RR2-10.2196/17900