Studies suggest that fluoride varnish (FV) application can reduce dental caries in child populations. The multiple-component national child oral health improvement programme in Scotland (Childsmile) includes nursery-based universal supervised toothbrushing and deprivation-targeted FV applications, together with community and dental practice prevention interventions. This trial, a double-blind, two-arm randomised control trial, aimed to assess the effectiveness and cost-effectiveness of the nursery-based FV applications plus treatment-as-usual (TAU) Childsmile programme interventions, compared to TAU Childsmile interventions alone, in children not targeted to receive nursery FV as part of the programme. Participating children in the first year of nursery (aged three), with or without existing caries, were randomised to either FV or TAU and followed up for 24 months until the first year of primary school. Treatments were administered at six-monthly intervals. The primary endpoint was “worsening of d3mft” from baseline to 24 months. Secondary endpoints were worsening of d3mfs, d3t, mt, and ft. Individual record-linkage captured wider programme activities and tertiary endpoints. A total of 1,284 children were randomised, leading to 1,150 evaluable children (n = 577 FV, n = 573 TAU, 10% dropouts). Mean age was 3.5 years, 50% were female (n = 576), 17% had caries at baseline (n = 195), all balanced between the groups. Most children received three/four treatments. Overall, 26.9% (n = 155) had worsened d3mft in the FV group, and 31.6% (n = 181) in the TAU group, with an odds ratio (OR) of 0.80 (0.62–1.03), p = 0.078. The results for worsening of the secondary endpoints were: d3mfs 0.79 (0.61–1.01) p = 0.063, d3t 0.75 (0.57–0.99) p = 0.043, mt 1.34 (0.75–2.39) p = 0.319, and ft 0.77 (0.53–1.14) p = 0.191. We calculated a number needed to treat of 21 and a cost of GBP 686 to prevent a single worsening of d3mft. There was a modest non-significant reduction in the worsening of d3mft in the nursery FV group compared to TAU, suggesting that this intervention is unlikely to represent an effective or cost-effective addition to the population oral health improvement programme.