Background: The effectiveness of cognitive-behavioral treatment (CBT) in inner city schools, when delivered by novice CBT clinicians, and compared to usual care (UC), is unknown. Objective: This pilot study addressed this issue by comparing a modular CBT for anxiety disorders to UC in a sample of 32 volunteer youth (mean age 10.28 years, 63% female, 84% African American) seen in school-based mental health programs. Methods: Youth were randomly assigned to CBT (n = 17) or UC (n = 15); independent evaluators conducted diagnostic interviews with children and parents at pre- and post-intervention, and at a one-month follow-up. Results: Based on intent-to-treat analyses, no differences were found in response rates between groups with 50 and 42% of the children in CBT, compared to 46 and 57% in UC no longer meeting criteria for an anxiety disorder at post-treatment and follow-up respectively. Similar improvements in global functioning were also found in both treatment groups. Baseline predictors of a positive treatment response included lower anxiety, fewer maladaptive thoughts, less exposure to urban hassles, and lower levels of parenting stress. Therapist use of more CBT session structure elements and greater competence in implementing these elements was also related to a positive treatment response. Conclusions: Findings from this small pilot failed to show that CBT was superior to UC when delivered by school-based clinicians. Large scale comparative effectiveness trials are needed to determine whether CBT leads to superior clinical outcomes prior to dissemination.