In order to compare the efficacy and toxicity of methotrexate and leflunomide for the treatment of rheumatoid arthritis, a double-blind randomized clinical trial was carried out at the Department of Medicine, Jinnah Medical College Hospital, Korangi, Karachi. The sample size was 240 patients and the duration of the study was 1 year. The patients enrolled were randomly divided into two groups (methotrexate and leflunomide). RA activity was clinically assessed by noting changes in the four primary (tender joint count, swollen joint count, physician and patient global assessment score) and three secondary (morning stiffness, pain intensity, HAQ) clinical efficacy end-points. Data were expressed as the mean ± SD. A P value of <0.05, calculated by paired t test, was considered significant. A total of 368 subjects were enrolled in this study. Of these, 128 subjects were withdrawn during the screening phase. Of the 240 subjects who were randomized and treated, 129 received leflunomide and 111 received methotrexate. The difference between the baseline and 12 month end-point measurements of all primary clinical efficacy end-points was significantly greater in methotrexate-treated than in leflunomide-treated subjects. Both leflunomide and methotrexate resulted in significant improvements in all secondary clinical efficacy end-points after 1 year of treatment. In both treatment groups, the most common reason for withdrawal during the treatment was adverse events. The results of this study indicate that both leflunomide and methotrexate are effective drugs for the long-term treatment of RA. It was concluded that methotrexate, which is a much cheaper drug than leflunomide, is the drug of choice, especially for patients who belong to low socioeconomic groups.