Background Protecting the skin barrier in early infancy may prevent atopic dermatitis (AD). We investigated if daily emollient use from birth to 2 months reduced AD incidence in high risk infants at 12 months. Methods This was a single-center, two-armed, investigator-blinded, randomized controlled clinical trial (NCT03871998). Term infants identified as high risk for AD (parental history of AD, asthma or allergic rhinitis) were recruited within 4 days of birth and randomised 1:1 to either twice-daily emollient application for the first 8 weeks of life (intervention group), using an emollient specifically formulated for very dry, AD-prone skin, or to standard routine skin care (control group). The primary outcome was cumulative AD incidence at 12 months. AD <6 months was diagnosed based on clinical presence of AD. The UK Working Party Diagnostic Criteria were applied when diagnosing AD between 6 and 12 months. Results 321 infants were randomised (161 intervention and 160 control), with 61 withdrawals (41 intervention, 20 control). The cumulative incidence of AD at 12 months was 32.8% in the intervention group vs. 46.4% in the control group, p = 0.036 [Relative risk (95%CI): 0.707 (0.516, 0.965)]. One infant in the intervention group was withdrawn from the study following development of a rash that had a potential relationship with the emollient. There was no significant difference in the incidence of skin infections between the intervention and control groups during the intervention period (5.0% vs. 5.7%, P>0.05). Conclusions This study has demonstrated that early initiation of daily specialized emollient use until 2 months reduces the incidence of AD in the first year of life in high-risk infants.