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Background Mental health care disparities are persistent and have increased in recent years. Compared with their White counterparts, members of racially and ethnically minoritized groups have less access to mental health care. Minoritized groups also have lower engagement in mental health treatment and are more likely to experience ineffective patient-provider communication, which contribute to negative mental health care experiences and poor mental health outcomes. Interventions that embrace recovery-oriented practices to support patient engagement and empower patients to participate in their mental health care and treatment decisions may help reduce mental health care disparities. Designed to achieve this goal, the Proactive, Recovery-Oriented Treatment Navigation to Engage Racially Diverse Veterans in Mental Healthcare (PARTNER-MH) is a peer-led patient navigation intervention that aims to engage minoritized patients in mental health treatment, support them to play a greater role in their care, and facilitate their participation in shared treatment decision-making. Objective The primary aim of this study is to assess the feasibility and acceptability of PARTNER-MH delivered to patients over 6 months. The second aim is to evaluate the preliminary effects of PARTNER-MH on patient activation, patient engagement, and shared decision-making. The third aim is to examine patient-perceived barriers to and facilitators of engagement in PARTNER-MH as well as contextual factors that may inhibit or promote the integration, sustainability, and scalability of PARTNER-MH using the Consolidated Framework for Implementation Research. Methods This pilot study evaluates the feasibility and acceptability of PARTNER-MH in a Veterans Health Administration (VHA) mental health setting using a mixed methods, randomized controlled trial study design. PARTNER-MH is tested under real-world conditions using certified VHA peer specialists (peers) selected through usual VHA hiring practices and assigned to the mental health service line. Peers provide PARTNER-MH and usual peer support services. The study compares the impact of PARTNER-MH versus a wait-list control group on patient activation, patient engagement, and shared decision-making as well as other patient-level outcomes. PARTNER-MH also examines organizational factors that could impact its future implementation in VHA settings. Results Participants (N=50) were Veterans who were mostly male (n=31, 62%) and self-identified as non-Hispanic (n=44, 88%) and Black (n=35, 70%) with a median age of 45 to 54 years. Most had at least some college education, and 32% (16/50) had completed ≥4 years of college. Randomization produced comparable groups in terms of characteristics and outcome measures at baseline, except for sex. Conclusions Rather than simply documenting health disparities among vulnerable populations, PARTNER-MH offers opportunities to evaluate a tailored, culturally sensitive, system-based intervention to improve patient engagement and patient-provider communication in mental health care for racially and ethnically minoritized individuals. Trial Registration ClinicalTrials.gov NCT04515771; https://clinicaltrials.gov/ct2/show/NCT04515771 International Registered Report Identifier (IRRID) DERR1-10.2196/37712