INTRODUCTION:Most successful trials of financial incentives for smoking cessation have offered large rewards contingent on outcomes. This study examines whether more modest incentives to encourage engagement, non-contingent on outcomes, also increase cessation; whether sending medications directly to participants boosts quitting; and whether these strategies are effective in Medicaid. STUDY DESIGN:Three-group RCT of usual care (UC); nicotine patch (NP); and NP and financial incentive (NP+FI). SETTING/PARTICIPANTS:Medicaid beneficiaries calling the California Smokers' Helpline, 2012-2013 (N=3,816). Data were analyzed in 2017. INTERVENTION:All participants enrolled in evidence-based, multisession telephone counseling. All received proof of enrollment with which they could obtain free quitting aids at their pharmacy. NP and NP+FI also received nicotine patches sent to their homes. NP+FI received up to $60 for completing counseling calls. MAIN OUTCOME MEASURES:Quit attempt rate, 7-day and 30-day abstinence at 2 and 7 months, and 6-month prolonged abstinence (primary outcome). RESULTS:In both complete-case and intention-to-treat analyses, outcomes trended upward from UC to NP to NP+FI. Differences between NP and UC were generally nonsignificant. By contrast, the NP+FI group significantly outperformed the other groups on all measures. In intention-to-treat analysis, compared with UC, NP+FI was more likely to make a quit attempt (68.4% vs 54.3%, p<0.001); be abstinent for 7 days at 2 months (36.1% vs 25.5%, p<0.001) and 7 months (21.2% vs 16.1%, p=0.002); be abstinent for 30 days at 2 months (30.0% vs 18.9%, p<0.001) and 7 months (21.5% vs 16.7%, p=0.004); and achieve 6-month prolonged abstinence (13.2% vs 9.0%, p=0.001). CONCLUSIONS:Financial incentives increased treatment engagement and short- and long-term smoking cessation, despite being modest and non-contingent on outcomes. The study found that incentives can be effective in a Medicaid population, and can feasibly be integrated into existing quitline services. TRIAL REGISTRATION:The trial is registered at www.clinicaltrials.gov NCT01502306. SUPPLEMENT INFORMATION:This article is part of a supplement entitled Advancing Smoking Cessation in California's Medicaid Population, which is sponsored by the California Department of Public Health.