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Background Transjugular intrahepatic portosystemic shunt (TIPS) has recently been reported to be effective in the treatment of cirrhotic patients with refractory ascites. However, the clinical utility of TIPS in the subset of refractory ascitic patients with good hepatic and renal function is uncertain. The aim of this study was to compare the efficacy of TIPS to that of large-volume paracentesis in cirrhotic patients with refractory ascites who have good hepatic and renal function. Methods Sixty cirrhotic patients with refractory ascites who presented with a Child-Pugh score of <11, serum bilirubin of <3 mg/dl and creatinine of <1.9 mg/dl were assigned randomly to TIPS (n = 30) or large-volume paracentesis plus albumin (n = 30). The primary endpoint was survival. The secondary endpoints were response to treatment and development of hepatic encephalopathy. Results The baseline characteristics were similar in the two groups. Seventeen patients treated with TIPS and 21 treated with paracentesis died during the study period. The cumulative probabilities of survival at 1 and 2 years were 80 and 64% in the TIPS group and 49 and 35% in the paracentesis group (p < 0.005). TIPS was significantly superior to paracentesis in the control of ascites (p < 0.005). Treatment failure was more frequent in the paracentesis group, whereas the frequency of hepatic encephalopathy was greater in the TIPS group. Conclusions In cirrhotic patients with refractory ascites who have good hepatic and renal function, TIPS improves survival and provides better control of ascites than large-volume paracentesis.