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Osteoarthritis (OA) is a degenerative joint disease with a high prevalence in dogs. Mesenchymal stem cells have been used to treat humans, dogs, and horses with OA. This report describes a prospective, randomized, blinded, and placebo-controlled clinical efficacy study of intraarticular allogeneic adipose stem cells for the treatment of dogs with osteoarthritis. Health assessments and measurements of pain and activity impairment were performed at baseline and at selected time points through day 60. The primary outcome variable was the owner Client-Specific Outcome Measurement (CSOM) and secondary measures included veterinary pain on manipulation, veterinary global score, and owner global score. The dogs were treated with either a saline placebo or a single dose of allogeneic adipose-derived mesenchymal stem cells in either one or two joints. Seventy-four dogs were statistically analyzed for efficacy outcomes. Success in the primary outcome variable, CSOM, was statistically improved in the treated dogs compared to the placebo dogs (79.2% versus 55.4%, p=0.029). The veterinary pain on manipulation score (92.8% versus 50.2%, p=0.017) and the veterinary global score (86.9% versus 30.8%, p= 0.009) were both statistically improved in treated dogs compared to placebo. There was no detected significant difference between treated and placebo dogs in the incidence of adverse events or negative health findings. Allogeneic adipose-derived stem cell treatment was shown to be efficacious compared to placebo. This large study of dogs also provides valuable animal clinical safety and efficacy outcome data to our colleagues developing human stem cell therapy.