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Abstract Introduction Etanercept, a tumor necrosis factor inhibitor, is used to treat rheumatoid arthritis (RA) and psoriatic arthritis (PsA), and is administered via subcutaneous injection. Injection site pain (ISP) associated with subcutaneous administration may affect compliance or hinder initiation of prescribed medications. To improve the patient experience, a new phosphate-free formulation of etanercept was evaluated for reduced ISP associated with administration. Methods This phase 3b, multicenter, randomized, double-blind, cross-over study compared the prior formulation of etanercept to a phosphate-free formulation. Etanercept-naïve adults with RA or PsA indicated for treatment with etanercept were eligible. Patients were randomized (1:1) to receive both etanercept formulations (50 mg) in one of two crossover sequences: prior formulation followed by phosphate-free formulation (sequence AB) or phosphate-free formulation followed by prior formulation (sequence BA) at visits 1 week apart. Patients self-reported ISP using a fit-for-purpose 100-mm visual analog scale within 30 s after injection. Safety outcomes included incidence of treatment-emergent adverse events. Mixed-effects analysis of variance model was used to assess ISP, with treatment, study period, sequence, and disease indication as fixed-effect covariates and patient-within-sequence as random effect. Results A total of 111 patients enrolled (56 sequence AB; 55 sequence BA). Mean ISP score for prior formulation was 23.1 mm and for phosphate-free formulation was 19.1 mm (mean difference − 4 mm; 95% confidence interval: − 8.0, 0.0; P = 0.048). Patients with the highest ISP scores from the prior formulation (by quartile cut points) had the largest reduction in pain with phosphate-free formulation. Injection site reactions were few in number and similar between formulations; no new safety signals were observed. Conclusions The new phosphate-free formulation of etanercept had statistically significantly lower mean pain scores than the prior formulation, with largest pain reductions observed among patients who reported highest pain with the prior formulation. Trial Registration ClinicalTrials.gov: NCT02986139. Funding Amgen Inc, Thousand Oaks, CA USA.