Objective To evaluate the efficacy and safety of leflunomide in comparison with methotrexate (MTX) on patients with rheumatoid arthritis (RA) in China.Methods Five hundred and sixty-six patients with active rheumatoid arthritis were randomly assigned to receive leflunomide at 20 mg once daily or MTX at 15 mg once weekly in a controlled trial. Five hundred and four patients completed the 12-week treatment and some patients continued the treatment for 24 weeks.Results Both leflunomide and MTX could improve the symptoms, signs, and joint function, but there were no changes in X-ray observations of patients with rheumatoid arthritis. In the leflunomide group, the overall rates of effectiveness at 12 weeks and 24 weeks were 86.94% and 92.31% respectively; the rates of remarkable improvement were 64.95% and 79.81% respectively. In the MTX group, the overall rates of effectiveness at 12 weeks and 24 weeks were 84.04% and 83.15% respectively; the rates of remarkable improvement were 56.81% and 75.28% respectively. According to intent-to-treat analysis, the ACR 20% response rates at 12 weeks and 24 weeks in the leflunomide group were 62.54% and 67.18% respectively, compared with 60.08% and 61.32% respectively in MTX group. No statistical differences were shown in the efficacy between the two groups (P>0.05). The adverse events in the leflunomide group were gastrointestinal symptoms, skin rash, alopecia, nervous system symptoms, decreased leukocyte count, and elevation of alanine aminotransferase (ALT). Most of these side effects were mild and transient. The incidence of adverse events in the leflunomide group was 16.84%, significantly lower than that in MTX group (28.17%, P=0.002).Conclusions Leflunomide is effective in the treatment of RA with less adverse events than MTX. Its efficacy is similar to MTX, but the incidence of adverse events and the rate of withdrawal due to adverse events were lower in the leflunomide group than in MTX group.