Background: The translation of Web-based physical activity intervention research into the real world is lacking and becoming increasingly important. Objective: To compare usage and effectiveness, in real-world settings, of a traditional Web 1.0 Web-based physical activity intervention, providing limited interactivity, to a Web 2.0 Web-based physical activity intervention that includes interactive features, such as social networking (ie, status updates, online "friends," and personalized profile pages), blogs, and Google Maps mash-ups. Methods: Adults spontaneously signing up for the freely available 10,000 Steps website were randomized to the 10,000 Steps website (Web 1.0) or the newly developed WALK 2.0 website (Web 2.0). Physical activity (Active Australia Survey), quality of life (RAND 36), and body mass index (BMI) were assessed at baseline, 3 months, and 12 months. Website usage was measured continuously. Analyses of covariance were used to assess change over time in continuous outcome measures. Multiple imputation was used to deal with missing data. Results: A total of 1328 participants completed baseline assessments. Only 3-month outcomes (224 completers) were analyzed due to high attrition at 12 months (77 completers). Web 2.0 group participants increased physical activity by 92.8 minutes per week more than those in the Web 1.0 group (95% CI 28.8-156.8; P=.005); their BMI values also decreased more (-1.03 kg/m2, 95% CI -1.65 to -0.41; P=.001). For quality of life, only the physical functioning domain score significantly improved more in the Web 2.0 group (3.6, 95% CI 1.7-5.5; P<.001). The time between the first and last visit to the website (3.57 vs 2.22 weeks; P<.001) and the mean number of days the website was visited (9.02 vs 5.71 days; P=.002) were significantly greater in the Web 2.0 group compared to the Web 1.0 group. The difference in time-to-nonusage attrition was not statistically significant between groups (Hazard Ratio=0.97, 95% CI 0.86-1.09; P=.59). Only 21.99% (292/1328) of participants (n=292 summed for both groups) were still using either website after 2 weeks and 6.55% (87/1328) were using either website after 10 weeks. Conclusions: The website that provided more interactive and social features was more effective in improving physical activity in real-world conditions. While the Web 2.0 website was visited significantly more, both groups nevertheless displayed high nonusage attrition and low intervention engagement. More research is needed to examine the external validity and generalizability of Web-based physical activity interventions.