We evaluated the effectiveness of community-based rehabilitation (CBR) in reducing depressive symptoms, alcohol use disorder, food insecurity and underweight in people with schizophrenia. This cluster-randomised controlled trial was conducted in a rural district of Ethiopia. Fifty-four sub-districts were allocated in a 1:1 ratio to the facility-based care [FBC] plus CBR arm and the FBC alone arm. Lay workers delivered CBR over 12 months. We assessed food insecurity (self-reported hunger), underweight (BMI< 18.5 kg/m2), depressive symptoms (PHQ-9) and alcohol use disorder (AUDIT ≥ 8) at 6 and 12 months. Seventy-nine participants with schizophrenia in 24 sub-districts were assigned to CBR plus FBC and 87 participants in 24 sub-districts were assigned to FBC only. There was no evidence of an intervention effect on food insecurity (aOR 0.52, 95% CI 0.16–1.67; p = 0.27), underweight (aOR 0.44, 95% CI 0.17–1.12; p = 0.08), alcohol use disorder (aOR 0.82, 95% CI 0.24–2.74; p = 0.74) or depressive symptoms (adjusted mean difference − 0.06, 95% CI −1.35, 1.22; p = 0.92). Psychosocial interventions in low-resource settings should support access to treatment amongst people with schizophrenia, and further research should explore how impacts on economic, physical and mental health outcomes can be achieved.