Abstract Background Cognitive behavior therapy for psychosis has been a prominent intervention in the psychological treatment of psychosis. It is, however, a challenging therapy to deliver and, in the context of increasingly rigorous trials, recent reviews have tempered initial enthusiasm about its effectiveness in improving clinical outcomes. Acceptance and commitment therapy shows promise as a briefer, more easily implemented therapy but has not yet been rigorously evaluated in the context of psychosis. The purpose of this trial is to evaluate whether Acceptance and Commitment Therapy could reduce the distress and disability associated with psychotic symptoms in a sample of community-residing patients with chronic medication-resistant symptoms. Methods/Design This is a single (rater)-blind multi-centre randomised controlled trial comparing Acceptance and Commitment Therapy with an active comparison condition, Befriending. Eligible participants have current residual hallucinations or delusions with associated distress or disability which have been present continuously over the past six months despite therapeutic doses of antipsychotic medication. Following baseline assessment, participants are randomly allocated to treatment condition with blinded, post-treatment assessments conducted at the end of treatment and at 6 months follow-up. The primary outcome is overall mental state as measured using the Positive and Negative Syndrome Scale. Secondary outcomes include preoccupation, conviction, distress and disruption to life associated with symptoms as measured by the Psychotic Symptom Rating Scales, as well as social functioning and service utilisation. The main analyses will be by intention-to-treat using mixed-model repeated measures with non-parametric methods employed if required. The model of change underpinning ACT will be tested using mediation analyses. Discussion This protocol describes the first randomised controlled trial of Acceptance and commitment therapy in chronic medication-resistant psychosis with an active comparison condition. The rigor of the design will provide an important test of its action and efficacy in this population. Trial registration Australian New Zealand Clinical Trials Registry: ACTRN12608000210370 . Date registered: 18 April 2008