Background Increasing both the frequency and quality of social interactions within treatments for anxiety and depressive disorders in older adults may improve their mental health outcomes and quality of life. This study aims to evaluate the clinical efficacy and cost utility of an enhanced cognitive behavioural therapy (CBT) plus social participation program in a sample of older adults with depression and/or anxiety. Methods A total of 172 community-dwelling adults aged 65 years or older with an anxiety and/or depressive disorder will be randomly allocated to either an enhanced CBT plus social participation program (n = 86) or standard CBT (n = 86). Both treatments will be delivered during 12 weekly individual sessions utilising structured manuals and workbooks. Participants will be assessed at pre-treatment, post-treatment, and 12-month follow-up. The primary outcome evaluates mean change in clinician-rated diagnostic severity of anxiety and depressive disorders from baseline to post-treatment (primary endpoint) based on a semi-structured diagnostic interview. Secondary outcomes evaluate changes in symptomatology on self-report anxiety and depression measures, as well as changes in social/community participation, social network, and perceived social support, loneliness, quality of life, and use of health services. Economic benefits will be evaluated using a cost-utility analysis to derive the incremental cost utility ratios for the enhanced CBT program. Discussion Outcomes from this study will provide support for the establishment of improved psychosocial treatment for older adults with anxiety and/or depression. Study outcomes will also provide health systems with a clear means to reduce the impact of poor emotional health in older age and its associated economic burden. In addition to the empirical validation of a novel treatment, the current study will contribute to the current understanding of the role of social participation in older adult wellbeing. Trial registration Prospectively registered on the Australian New Zealand Clinical Trials Registry (ID: ACTRN12619000242123; registered 19^th February 2019) and the ISRCTN registry (ID: ISRCTN78951376; registered 10^th July 2019).