The best treatment for the active and lucid elderly patient with a displaced intracapsular fracture of the femoral neck is still controversial. Randomised controlled trials have shown that a primary total hip replacement is superior to internal fixation as regards the need for secondary surgery, hip function and health-related quality of life. Despite good results achieved with total hip replacement in this group, most orthopaedic surgeons still advocate hemiarthroplasty for this injury. We studied 120 patients with a mean age of 81 years (70 to 90) with an acute displaced intracapsular fracture of the femoral neck. They were randomly allocated to be treated with either a bipolar hemiarthroplasty or total hip replacement. Outcome measurements included peri-operative data, general and hip-specific complications, hip function and health-related quality of life. The patients were reviewed at four and 12 months. The duration of surgery was longer in the total hip replacement group (102 minutes (70 to 151)) versus 78 minutes (43 to 131) (p<0.001), and the intra-operative blood loss was increased 460 ml (100 to 1100) versus 320 ml (50 to 850) (p<0.001), but there were no differences between the groups regarding any complications or mortality. There were no dislocations in either group. Hip function measured by the Harris hip score was significantly better in the total hip replacement group at both follow-up periods (p=0.011 and p<0.001, respectively). The health-related quality of life measure was in favour of the total hip replacement group but did not reach statistical significance (p=0.818 at four months and p=0.636 at 12 months). These results indicate that a total hip replacement provides better function than a bipolar hemiarthroplasty as soon as one year post-operatively, without increasing the complication rate. We recommend total hip replacement as the primary treatment for this group of patients.