Objective: To assess the effect of treatment with febuxostat versus placebo on joint damage in hyperuricemic subjects with early gout (1 or 2 gout flares). Methods: In this double-blind, placebo-controlled study, 314 subjects with hyperuricemia (serum uric acid [UA] level of ≥7.0 mg/dl) and early gout were randomized 1:1 to receive once-daily febuxostat 40 mg (increased to 80 mg if the serum UA level was ≥6.0 mg/dl on day 14) or placebo. The primary efficacy end point was the mean change from baseline to month 24 in the modified Sharp/van der Heijde erosion score for the single affected joint. Additional efficacy end points included change from baseline to month 24 in the Rheumatoid Arthritis Magnetic Resonance Imaging Scoring (RAMRIS) scores for synovitis, erosion, and edema in the single affected joint, the incidence of gout flares, and serum UA levels. Safety was assessed throughout the study. Results: Treatment with febuxostat did not lead to any notable changes in joint erosion over 2 years. In both treatment groups, the mean change from baseline to month 24 in the modified Sharp/van der Heijde erosion score for the single affected joint was minimal, with no between-group differences. However, treatment with febuxostat significantly improved the RAMRIS synovitis score at month 24 compared with placebo treatment (change from baseline −0.43 versus −0.07; P <0.001), decreased the overall incidence of gout flares (29.3% versus 41.4%; P < 0.05), and improved serum UA control (62.8% versus 5.7%; P < 0.001). No major safety concerns were reported. Conclusion: Urate-lowering therapy with febuxostat improved magnetic resonance imaging–determined synovitis and reduced the incidence of gout flares in subjects with early gout.