Objective Chronic knee pain is a major cause of disability and health care expenditure, but there are concerns about efficacy, cost, and side effects associated with usual primary care. Conservative rehabilitation may offer a safe, effective, affordable alternative. We compared the effectiveness of a rehabilitation program integrating exercise, self-management, and active coping strategies (Enabling Self-management and Coping with Arthritic Knee Pain through Exercise [ESCAPE-knee pain]) with usual primary care in improving functioning in persons with chronic knee pain. Methods We conducted a single-blind, pragmatic, cluster randomized controlled trial. Participants age ≥50 years, reporting knee pain for >6 months, were recruited from 54 inner-city primary care practices. Primary care practices were randomized to continued usual primary care (i.e., whatever intervention a participant's primary care physician deemed appropriate), usual primary care plus the rehabilitation program delivered to individual participants, or usual primary care plus the rehabilitation program delivered to groups of 8 participants. The primary outcome was self-reported functioning (Western Ontario and McMaster Universities Osteoarthritis Index physical functioning [WOMAC-func]) 6 months after completing rehabilitation. Results A total of 418 participants were recruited; 76 (18%) withdrew, only 5 (1%) due to adverse events. Rehabilitated participants had better functioning than participants continuing usual primary care (−3.33 difference in WOMAC-func score; 95% confidence interval [95% CI] −5.88, −0.78; P = 0.01). Improvements were similar whether participants received individual rehabilitation (−3.53; 95% CI −6.52, −0.55) or group rehabilitation (−3.16; 95% CI −6.55, −0.12). Conclusion ESCAPE-knee pain provides a safe, relatively brief intervention for chronic knee pain that is equally effective whether delivered to individuals or groups of participants.