This study evaluated the efficacy and long-term effectiveness of intensive short-term dynamic psychotherapy (ISTDP) in the treatment of patients with DSM-IV personality disorders (PD). Twenty-seven patients with PD were randomized to treatment with ISTDP or a minimal-contact, delayed-treatment control condition. ISTDP-treated patients improved significantly more than controls on all primary outcome indices, reaching the normal ranges on both the brief symptom inventory (1.51-0.51, p < 0.001) and inventory of interpersonal problems (1.56-0.67, p < 0.001). When control patients were treated, they experienced benefits similar to the initial treatment group. In long-term follow-up, the whole group maintained their gains and had an 83.3% reduction of personality disorder diagnoses. Treatment costs were thrice offset by reductions in medication and disability payments. This preliminary study of ISTDP suggests it is efficacious and cost-effective in the treatment of PD. Limitations of this study and suggestions for future research are discussed.