Hydroxyurea is an antimetabolite drug that induces fetal haemoglobin in sickle cell disease. However, its clinical usefulness in β-thalassaemia is unproven. We conducted a randomised, double-blind, placebo-controlled clinical trial to evaluate the efficacy and safety of hydroxyurea in transfusion-dependent β-thalassaemia. Sixty patients were assigned 1:1 to oral hydroxyurea 10-20 mg/kg/day or placebo for 6 months by stratified block randomisation. Hydroxyurea treatment did not alter the blood transfusion volume overall. However, a significantly higher proportion of patients on hydroxyurea showed increases in fetal haemoglobin percentage (89% vs. 59%; p < 0.05) and reductions in erythropoietic stress as measured by soluble transferrin receptor concentration (79% vs. 40%; p < 0.05). Based on fetal haemoglobin induction (> 1.5%), 44% of patients were identified as hydroxyurea-responders. Hydroxyurea-responders, required significantly lower blood volume (77 ± SD27ml/kg) compared to hydroxyurea-non-responders (108 ± SD24ml/kg; p < 0.01) and placebo-receivers (102 ± 28ml/kg; p < 0.05). Response to hydroxyurea was significantly higher in patients with HbE β-thalassaemia genotype (50% vs. 0%; p < 0.01) and Xmn1 polymorphism of the γ-globin gene (67% vs. 27%; p < 0.05). We conclude that oral hydroxyurea increased fetal haemoglobin percentage and reduced erythropoietic stress of ineffective erythropoiesis in patients with transfusion-dependent β-thalassaemia. Hydroxyurea reduced the transfusion burden in approximately 40% of patients. Response to hydroxyurea was higher in patients with HbE β-thalassaemia genotype and Xmn1 polymorphism of the γ-globin gene.