Injection sclerotherapy of bleeding oesophageal varices is undoubtedly beneficial but it is associated with a substantial complication rate, and variceal rebleeding is common during the treatment period before variceal obliteration is achieved. We aimed to find out whether endoscopic variceal banding ligation is safer and more effective. The two methods were compared in a randomised controlled trial of 103 patients (54 assigned to banding ligation, and 49 to injection sclerotherapy) of whom 21 (39%) and 23 (47%), respectively, had active bleeding at index endoscopy. Both treatments were highly effective in controlling active haemorrhage (91% and 92% respectively). Variceal obliteration was not achieved for 22 patients in each group, but among those whose varices were eradicated, banding ligation achieved obliteration more quickly than did sclerotherapy (mean 39 [SD 4] vs 72 [7] days, p = 0.004) and in fewer endoscopy sessions (3.4 [2.2] vs 4.9 [3.5], p = 0.006). Rebleeding was less common in the banding ligation group than in the sclerotherapy group (16 [30%] vs 26 [53%], p < 0.05). There was no difference in outcome between the groups, but 14 sclerotherapy patients were withdrawn from the trial (7 for orthotopic liver transplantation) compared with only 5 (1 for liver transplantation) in the banding ligation group (p < 0.05). Complication rates were similar in the two groups. Variceal banding ligation is a safe and effective technique, which obliterates varices more quickly and with a lower rebleeding rate than injection sclerotherapy.