Abstract Background Early Intervention in Psychosis (EIP) services improve health outcomes for young people with psychosis in the medium–long term, but 25% of young people disengage in the first 12 months with costs to their mental health, families, society and the NHS. This study will evaluate the effectiveness, cost-effectiveness and implementation of a team-based motivational Early Youth Engagement (EYE-2) intervention. Method The study design is a cluster randomised controlled trial (RCT) with economic evaluation, comparing the EYE-2 intervention + standardised EIP service to standardised EIP service alone, with randomisation at the team level. A process evaluation will evaluate the delivery of the intervention qualitatively and quantitatively across contexts. The setting is 20 EIP teams in 5 sites: Manchester, South London, East Anglia, Thames Valley and Hampshire. Participants are young people (14–35 years) with first episode psychosis, and EIP staff. The intervention is the team-based motivational engagement (EYE-2) intervention, delivered alongside standardised EIP services, and supported by additional training, website, booklets and social groups. The comparator is the standardised EIP service. Both interventions are delivered by EIP clinicians. The primary outcome is time to disengagement (time in days from date of allocation to care coordinator to date of last contact following refusal to engage with EIP service, or lack of response to EIP contact for a consecutive 3-month period). Secondary outcomes include mental and physical health, deaths, social and occupational function, recovery, satisfaction and service use at 6, 12, 18 and 24 months. A 12-month within-trial economic evaluation will investigate cost-effectiveness from a societal perspective and from an NHS perspective. Discussion The trial will provide the first test of an engagement intervention in standardised care, with the potential for significant impact on the mental health and wellbeing of young people and their families, and economic benefits for services. The intervention will be highly scalable, supported by the toolkit including manuals, commissioning guide, training and resources, adapted to meet the needs of the diverse EIP population, and based on an in-depth process evaluation. Trial registration ISRCTN 51629746 prospectively registered 7th May 2019. Date assigned 10th May 2019.