Objective: Children born small for gestational age (SGA) are at increased risk of health issues. This study evaluated the efficacy, safety and optimal dose of PEGylated‐recombinant human growth hormone (PEG‐rhGH) in these children. Design: In this multicentre, randomised, open‐label, Phase 2 trial conducted at nine clinical sites in China, patients were randomised 1:1 to receive subcutaneous injections of PEG‐rhGH at 0.1 mg/kg/week (low dose) or 0.2 mg/kg/week (high dose) for 52 weeks. Patients: Ninety‐six children were born SGA. Measurements: The primary endpoint was the change in height standard deviation score (HT‐SDS) at Week 52. Results: At Week 52, the change in HT‐SDS in the high‐ and low‐dose groups was 0.923 ± 0.352 (p < 0.0001) and 0.511 ± 0.336 (p < 0.0001), respectively (least‐squares means difference, 0.410; 95% confidence interval 0.270–0.551; p < 0.0001). Height velocity (9.94 ± 1.55 vs. 8.37 ± 1.50 cm/year) was also significantly higher in the high‐dose than in the low‐dose group (p < 0.0001). Change in insulin‐like growth factor (IGF)‐1 SDS was 1.867 ± 1.747 and 1.168 ± 1.193 in the high‐ and low‐dose groups, respectively (p = 0.0189). IGF‐1/IGF binding protein‐3 and bone maturity were improved in both groups at Week 52. Most treatment‐emergent adverse events were mild to moderate; the safety profile was similar in both groups. Conclusions: PEG‐rhGH at either dose for 52 weeks was effective and well tolerated in children born SGA. Patients in the high‐dose group achieved greater improvement in HT‐SDS than in the low‐dose group. Trial Registration: ClinicalTrials. gov identifier: NCT02375620