Introduction Lumbar spinal stenosis is a common cause of low back and leg pain in the elderly and affects both physical activity and quality of life. First-line treatments are non-surgical options but if unsuccessful, surgery is advocated. The literature is not clear as to the outcome of surgery compared with non-surgical treatment, and the optimal time for surgery is not explicit. This observational study is designed to investigate the course of treatment, compare effectiveness of surgical and non-surgical management in patients with lumbar spinal stenosis and identify prognostic factors for outcome in the context of current clinical practice. Materials and analysis Prospectively registered data on treatment, outcome and patient characteristics are collected from nationwide registers on health and social issues, a clinical registry of people with chronic back pain and hospital medical records. Primary outcome is change in physical function measured by the Zurich Claudication Questionnaire. Secondary outcomes are changes in symptom severity, pain-related function, health-related quality of life and general self-efficacy. Outcomes are assessed at baseline and 6 and 12 months. Outcomes at 12 months will be compared for patients who undergo surgery for lumbar spinal stenosis and patients managed non-surgically, using different analytical approaches. Prespecified prognostic factors of interest at baseline include treatment allocation, back and leg pain intensity, comorbidity, duration of symptoms, pretreatment function, self-rated health, income, general self-efficacy and MRI-graded severity of central stenosis. Ethics and dissemination The study has been evaluated by the Regional Committees on Health Research for Southern Denmark (S-20172000-200) and notified to the Danish Data Protection Agency (18/22336). All participants provide consent. Findings will be disseminated in peer-reviewed publications and presented at national and international conferences according to the Strengthening the Reporting of Observational Studies in Epidemiology and Prognosis Research Strategy statements. Potential sources of bias will be addressed using Risk of Bias in Non-randomised Studies of Interventions.