This study is the first large prospective RCT of sentinel node biopsy (SNB) compared with standard axillary treatment (level I-III axillary lymph node dissection or four node sampling), which includes comprehensive and repeated quality of life (QOL) assessments over 18 months. Patients (n = 829) completed the Functional Assessment of Cancer Therapy - Breast (FACT-B+4) and the Spielberger State/Trait Anxiety Inventory (STAI) at baseline (pre-surgery) and at 1, 3, 6, 12, and 18 months post-surgery. There were significant differences between treatment groups favouring the SNB group throughout the 18 months assessment. Patients in the standard treatment group showed a greater decline in Trial Outcome Index (TOI) scores (physical well-being, functional well-being and breast cancer concerns subscales in FACT-B+4) and recovered more slowly than patients in the SNB group (p < 0.01). The change in total FACT-B+4 scores (measuring global QOL) closely resembled the TOI results. 18 months post-surgery approximately twice as many patients in the standard group compared with the SNB group reported substantial arm swelling (14% versus 7%) (p = 0.002) or numbness (19% versus 8.7%) (p < 0.001). Despite the uncertainty about undergoing a relatively new procedure and the possible need for further surgery, there was no evidence of increased anxiety amongst patients randomised to SNB (p > 0.05). For 6 months post-surgery younger patients reported less favourable QOL scores (p < 0.001) and greater levels of anxiety (p < 0.01). In view of the benefits regarding arm functioning and quality of life, the data from this randomised study support the use of SNB in patients with clinically node negative breast cancer.