Background: Despite some prospective case series showing effectiveness of vaginal laser to treat genitourinary syndrome of menopause (GSM), there is a paucity of placebo-controlled level one evidence. Aim: To assess the effect of fractional carbon dioxide (CO2) laser therapy to treat GSM against a sham comparator. Methods: We conducted a parallel, randomized, double-blind, sham-controlled trial to compare menopausal women treated with fractional CO2 laser against sham treatment for improvement in GSM-related dyspareunia. Three treatments were given 6 weeks apart, and participants attended a 6-month visit from study start for primary (proportion improved) and secondary (vaginal health index, VHI; visual analogue scale, VAS; modified global assessment, PGI-I; Female Sexual Function Index, FSFI; Day-to-Day Impact of Vaginal Aging, DIVA; Urinary Distress Inventory short-form, UDI-6) assessments. Outcomes: The primary endpoint was a 2-stage improvement in GSM-related dyspareunia from baseline to 6-months determined by a severity scale, and the proportion of subjects who achieved this were compared between groups. Results: Thirty participants were randomized to laser (n = 14) or sham (n = 16). In the treatment arm, 13 attended all treatments, and 1 attended at least 2 while in the sham arm, 14 attended all treatments, and 2 attended at least 2 treatments. Twelve (86%) in the treatment arm and 16 (100%) in the sham arm attended the 6-month visit. There were no differences in the proportion improved between treatments and controls (64% vs. 67%, respectively, P = 1.000). Both arms showed significant within-group improvements based on VHI and VAS, but not between groups. Similar findings were observed on sexual impact questionnaires with improvements within both groups from baseline to 6 months but not by median differences between the groups at 6 months. There were no adverse events in either of the arms. Clinical Implications: Further well-powered research is needed to determine efficacy of fractional CO2 laser for the treatment of GSM, especially in light of a potential placebo effect. Strengths & Limitations: We present a sham-controlled double-blinded randomized trial using validated tools; the main limitation included an underpowered proportion of sexually active participants for the primary outcome. Conclusion: This study was underpowered to draw conclusions regarding the efficacy of fractional CO2 laser therapy in the treatment of GSM. We did observe improvements in the sham-arm to suggest a possible placebo contribution. Further well-powered level one research is needed to demonstrate the therapeutic effect of this novel modality. Copyright (C) 2021 International Society for Sexual Medicine. Published by Elsevier Inc. All rights reserved.