BACKGROUND: Chronic illness is a significant driver of the global burden of disease and associated health care costs. People living with severe chronic illness are heavy users of acute hospital services; better coordination of their care could potentially improve health outcomes while reducing hospital use. The Care Navigation trial will evaluate an in-hospital coordinated care intervention on health service use and quality of life in chronically ill patients.Methods/design: A randomised controlled trial in 500 chronically ill patients presenting to the emergency department of a hospital in Western Sydney, Australia. Participants have three or more hospital admissions within a previous 12 month period and either aged >=70 years; or aged >=45 years and of Aboriginal or Torres Strait Islander descent; or aged >= 16 with a diagnosis of a respiratory or cardiology related illness. Patients are randomised to either the coordinated care program (Care Navigation), or to usual care. The Care Navigation program consists of dedicated nurses who conduct patient risk assessments, oversee patient nursing while in hospital, and guide development of a care plan for the management of chronic illness after being discharged from hospital. These nurses also book community appointments and liaise with general practitioners. The main outcome variables are the number of emergency department re-presentations and hospital readmissions, and quality of life during a 24 month follow-up. Secondary outcomes are length of hospital stay, mortality, time to first hospital re-admission, time to first emergency department re-presentation, patient satisfaction, adherence to prescribed medications, amount and type of in-hospital referrals made for consultations and diagnostic testing, and the number and type of community health referrals. A process evaluation and economic analysis will be conducted alongside the randomised trial. DISCUSSION: A trial of in-hospital care coordination may support recent evidence that engaging primary health services in care plans linked to multidisciplinary team support improves patient outcomes and reduces costs to the health system. This will inform local, national and international health policy.Trial registration: Australia New Zealand Clinical Trials Registry ACTRN12609000554268.