Subjective tinnitus is the sensation of hearing a sound in the absence of an external stimulus. Although an estimated 30 million Americans experience chronic tinnitus, only a small percentage are significantly bothered by the sensation. However, this population is currently in need of effective therapy that reduces the impact of tinnitus. Tinnitus retraining therapy has been promoted as an effective intervention for treating chronic bothersome tinnitus from any etiology. The aim of this study was to compare the effect of tinnitus retraining therapy on the loudness and annoyance of tinnitus with a control group. Subjects with subjective, stable, bothersome, chronic tinnitus, and normal to near-normal hearing in the speech frequencies (average pure-tone thresholds for 0.5, 1, 2, and 4 kHz ≤ 30 dB HL) were recruited to participate in a study for the effect of tinnitus retraining therapy (TRT) on the loudness and annoyance of their tinnitus. Participants were assigned to either the TRT arm or a control arm, with assignment balanced between groups by tinnitus severity. After baseline evaluation, participants received acoustic stimulation devices and 3 mos of individual counseling. An integrated computerized test battery of questionnaires and psychophysical procedures were used to evaluate participants at 6, 12, and 18 mos after enrollment. The primary outcome measure was the change in total score on the tinnitus handicap inventory. Secondary outcome measures were change in global tinnitus impact on a tinnitus experience questionnaire, subjective tinnitus loudness rating, and tinnitus loudness objectively measured using a psychophysical matching procedure. Both TRT and general counseling without additional sound therapy are effective in reducing the annoyance and impact of tinnitus. The largest effect on overall tinnitus handicap was observed in the TRT participants, with an effect size of 1.13. However, a clinically significant effect was also observed in the control group, with an effect size of 0.78. Individuals with moderate to severe tinnitus, without hearing loss in the speech frequency range, benefit from treatment with either TRT or general counseling. The global improvement in tinnitus handicap with TRT accrues over an 18-mo period and seems to be a robust and clinically significant effect.