Background A balloon spacer is a relatively simple addition to an arthroscopic debridement procedure for irreparable rotator cuff tears. Objective To evaluate the clinical and cost-effectiveness of a subacromial balloon spacer for individuals undergoing arthroscopic debridement for irreparable rotator cuff tears. Design A multicentre participant-and assessor-blinded randomised controlled trial comparing arthroscopic debridement with the InSpace® (Stryker, Kalamazoo, MI, USA) balloon to arthroscopic debridement alone, using a novel adaptive design. Pretrial simulations informed stopping boundaries for two interim analyses, using outcome data from early and late time points. Setting A total of 24 NHS centres. Participants Adults with a symptomatic, irreparable rotator cuff tear for whom conservative management had been unsuccessful. Interventions Arthroscopic debridement of the subacromial space plus insertion of the InSpace balloon compared with arthroscopic debridement alone. Main outcome measures Oxford Shoulder Score at 12 months. Results A predefined stopping boundary was met at the first interim analysis. Recruitment stopped with 117 participants randomised. We obtained primary outcome data on 114 participants (97%). The mean Oxford Shoulder Score at 12 months was 34.3 in the debridement-only group (59 participants of 61 randomised) and 30.3 in the debridement with balloon group (55 participants of 56 randomised; mean difference: −4.2; 95% confidence interval −8.2 to −0.26; p = 0.037). There was no difference in safety events. In the cost-effectiveness analysis, debridement-only dominated with a probability of