BACKGROUND: Lateral epicondylitis of the elbow is a frequent condition with long-lasting symptoms. Corticosteroid injection is increasingly discouraged and there is little knowledge on the combined effect of corticosteroid injection and physiotherapy for acute conditions. We wanted to investigate the efficacy of physiotherapy alone and combined with corticosteroid injection for acute lateral epicondylitis. METHODS: A randomized, controlled study with one-year follow-up was conducted in a general practice setting in Sarpsborg, Norway. We included 177 men and women aged 18 to 70 with clinically diagnosed lateral epicondylitis of recent onset (2 weeks to 3 months). They were randomly assigned to one of three treatments: physiotherapy with two corticosteroid injections, physiotherapy with two placebo injections or wait-and-see (control). Physiotherapy consisted of deep transverse friction massage, Mills manipulation, stretching, and eccentric exercises. We used double blind injection of corticosteroid and single blind assessments. The main outcome measure was treatment success defined as patients rating themselves completely recovered or much better on a six-point scale. RESULTS: One hundred fifty-seven patients (89 %) completed the trial. Placebo injection with physiotherapy showed no significant difference compared to control or to corticosteroid injection with physiotherapy at any follow-up. Corticosteroid injection with physiotherapy had a 10.6 times larger odds for success at six weeks (odds ratio 10.60, p < 0.01) compared to control (NNT = 3, 99 % CI 1.5 to 4.2). At 12 weeks there was no significant difference between these groups, but at 26 weeks the odds for success were 91 % lower (OR 0.09, p < 0.01) compared to control, showing a large negative effect (NNT = 5, 99 % CI 2.1 to 67.4). At 52 weeks there was no significant difference. Both control and placebo injection with physiotherapy showed a gradual increase in success. CONCLUSIONS: Acute lateral epicondylitis is a self-limiting condition where 3/4 of patients recover within 52 weeks. Physiotherapy with deep transverse friction massage, Mills manipulation, stretching, and eccentric exercises showed no clear benefit, and corticosteroid injection gave no added effect. Corticosteroid injections combined with physiotherapy might be considered for patients needing a quick improvement, but intermediate (12 to 26 weeks) worsening of symptoms makes the treatment difficult to recommend. TRIAL REGISTRATION: ClinicalTrials.gov Identifier: NCT00826462.