BACKGROUND: Informal settlements are high density areas in and around cities, characterized by a lack of formal planning and basic amenities, being known in South Africa for high levels of mental disorder driven by violence, and complex social and economic challenges. In particular, young men's poor mental health goes untreated, with relatively few evidenced-based interventions available in this setting. AIM: This cluster randomized controlled trial investigated the effectiveness of Stepping Stones and Creating Futures (SS/CF), a participatory gender transformative and economic empowerment intervention, on the mental health of young men living in South African informal settlement. METHODS: A total of 674 young men ages 18 to 30 years were recruited in 34 clusters in Durban's urban informal settlements. Clusters were randomly allocated (1:1) to either the experimental SS/CF or control arm and participants were followed-up over 24-months. Intention-to-treat analysis based on generalized estimating equations (GEE) were fitted to quantify the impact of SS/CF on the men's anxiety and post-traumatic stress (PTS) symptomatology. RESULTS: At end of the 24 months follow-period, anxiety (adjusted odds ratio [aOR]: 0.62,  = .04, 95% CI [0.39, 0.99]) and PTS (aOR = 0.52,  = .03, 95% CI [0.29, 0.93]) were significantly lower for group assigned to the SS/CF compared to the control group. CONCLUSION: SS/CF, a gender transformative and livelihoods strengthening intervention designed to address poverty and other socio-economic challenges in informal settlements reduced anxiety and PTS among men with mental health challenges living in informal settlements.