To determine the efficacy of fluoride varnish (5% NaF, Duraphat, Colgate) added to caregiver counseling to prevent early childhood caries, we conducted a two-year randomized, dental-examiner-masked clinical trial. Initially, 376 caries-free children, from low-income Chinese or Hispanic San Francisco families, were enrolled (mean age +/- standard deviation, 1.8 +/- 0.6 yrs). All families received counseling, and children were randomized to the following groups: no fluoride varnish, fluoride varnish once/year, or fluoride varnish twice/year. An unexpected protocol deviation resulted in some children receiving less active fluoride varnish than assigned. Intent-to-treat analyses showed a fluoride varnish protective effect in caries incidence, p < 0.01. Analyzing the number of actual, active fluoride varnish applications received resulted in a dose-response effect, p < 0.01. Caries incidence was higher for ‘counseling only’ vs. ‘counseling + fluoride varnish assigned once/year’ (OR = 2.20, 95% CI 1.19-4.08) and ‘twice/year’ (OR = 3.77, 95% CI 1.88-7.58). No related adverse events were reported. Fluoride varnish added to caregiver counseling is efficacious in reducing early childhood caries incidence.