Purpose The optimal regimen intensity before allogeneic hematopoietic cell transplantation (HCT) is unknown. We hypothesized that lower treatment-related mortality (TRM) with reduced-intensity conditioning (RIC) would result in improved overall survival (OS) compared with myeloablative conditioning (MAC). To test this hypothesis, we performed a phase III randomized trial comparing MAC with RIC in patients with acute myeloid leukemia or myelodysplastic syndromes. Patients and Methods Patients age 18 to 65 years with HCT comorbidity index ≤ 4 and < 5% marrow myeloblasts pre-HCT were randomly assigned to receive MAC (n = 135) or RIC (n = 137) followed by HCT from HLA-matched related or unrelated donors. The primary end point was OS 18 months post-random assignment based on an intent-to-treat analysis. Secondary end points included relapse-free survival (RFS) and TRM. Results Planned enrollment was 356 patients; accrual ceased at 272 because of high relapse incidence with RIC versus MAC (48.3%; 95% CI, 39.6% to 56.4% and 13.5%; 95% CI, 8.3% to 19.8%, respectively; P < .001). At 18 months, OS for patients in the RIC arm was 67.7% (95% CI, 59.1% to 74.9%) versus 77.5% (95% CI, 69.4% to 83.7%) for those in the MAC arm (difference, 9.8%; 95% CI, -0.8% to 20.3%; P = .07). TRM with RIC was 4.4% (95% CI, 1.8% to 8.9%) versus 15.8% (95% CI, 10.2% to 22.5%) with MAC ( P = .002). RFS with RIC was 47.3% (95% CI, 38.7% to 55.4%) versus 67.8% (95% CI, 59.1% to 75%) with MAC ( P < .01). Conclusion OS was higher with MAC, but this was not statistically significant. RIC resulted in lower TRM but higher relapse rates compared with MAC, with a statistically significant advantage in RFS with MAC. These data support the use of MAC as the standard of care for fit patients with acute myeloid leukemia or myelodysplastic syndromes.