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Objective To test whether pay for performance (P4P) is an effective method to improve adolescent substance use disorder treatment implementation and efficacy. Design Cluster randomized trial. Setting Community-based treatment organizations. Participants Twenty-nine community-based treatment organizations, 105 therapists, and 986 adolescent patients (953 with complete data). Intervention Community-based treatment organizations were assigned to 1 of the following conditions: the implementation-as-usual (IAU) control condition or the P4P experimental condition. In addition to delivering the same evidence-based treatment (ie, using the Adolescent Community Reinforcement Approach [A-CRA]), each organization received standardized levels of funding, training, and coaching from the treatment developers. Therapists in the P4P condition received US $50 for each month that they demonstrated competence in treatment delivery (ie, A-CRA competence) and US $200 for each patient who received a specified number of treatment procedures and sessions (ie, target A-CRA) that has been found to be associated with significantly improved patient outcomes. Main Outcome Measures Outcomes included A-CRA competence (ie, a therapist-level implementation measure), target A-CRA (ie, a patient-level implementation measure), and remission status (ie, a patient-level treatment effectiveness measure). Results Relative to therapists in the IAU control condition, therapists in the P4P condition were significantly more likely to demonstrate A-CRA competence (24.0% vs 8.9%; event rate ratio, 2.24; 95% CI, 1.12-4.48; P = .02). Relative to patients in the IAU control condition, patients in the P4P condition were significantly more likely to receive target A-CRA (17.3% vs 2.5%; odds ratio, 5.19; 95% CI, 1.53-17.62; P = .01). However, no significant differences were found between conditions with regard to patients' end-of-treatment remission status. Conclusion Pay for performance can be an effective method of improving treatment implementation. Trial Registration clinicaltrials.gov Identifier: NCT01016704