Vertebral fractures are often painful and lead to reduced quality of life and disability. We compared the efficacy and safety of balloon kyphoplasty to nonsurgical therapy over 24 months in patients with acute painful fractures. Adults with one to three vertebral fractures were randomized within 3 months from onset of pain to undergo kyphoplasty (n = 149) or nonsurgical therapy (n = 151). Quality of life, function, disability, and pain were assessed over 24 months. Kyphoplasty was associated with greater improvements in Short-Form 36 (SF-36) Physical Component Summary (PCS) scores when averaged across the 24-month follow-up period compared with nonsurgical therapy [overall treatment effect 3.24 points, 95% confidence interval (CI) 1.47–5.01, p = .0004]; the treatment difference remained statistically significant at 6 months (3.39 points, 95% CI 1.13–5.64, p = .003) but not at 12 months (1.70 points, 95% CI −0.59 to 3.98, p = .15) or 24 months (1.68 points, 95% CI −0.63 to 3.99, p = .15). Greater improvement in back pain was observed over 24 months for kyphoplasty (overall treatment effect −1.49 points, 95% CI −1.88 to −1.10, p < .0001); the difference between groups remained statistically significant at 24 months (−0.80 points, 95% CI −1.39 to −0.20, p = .009). There were two device-related serious adverse events in the second year that occurred at index vertebrae (a spondylitis and an anterior cement migration). There was no statistically significant difference between groups in the number of patients (47.5% for kyphoplasty, 44.1% for control) with new radiographic vertebral fractures; fewer fractures occurred (∼18%) within the second year. Compared with nonsurgical management, kyphoplasty rapidly reduces pain and improves function, disability, and quality of life without increasing the risk of additional vertebral fractures. The differences from nonsurgical management are statistically significant when averaged across 24 months. Most outcomes are not statistically different at 24 months, but the reduction in back pain remains statistically significant at all time points. © 2011 American Society for Bone and Mineral Research.