Objective To compare the survival outcomes of patients treated with surgery or radiotherapy for prostate cancer. Design Observational study. Setting Sweden, 1996-2010. Participants 34 515 men primarily treated for prostate cancer with surgery (n=21 533) or radiotherapy (n=12 982). Patients were categorised by risk group (low, intermediate, high, and metastatic), age, and Charlson comorbidity score. Main outcome measures Cumulative incidence of mortality from prostate cancer and other causes. Competing risks regression hazard ratios for radiotherapy versus surgery were computed without adjustment and after propensity score and traditional (multivariable) adjustments, as well as after propensity score matching. Several sensitivity analyses were performed. Results Prostate cancer mortality became a larger proportion of overall mortality as risk group increased for both the surgery and the radiotherapy cohorts. Among patients with non-metastatic prostate cancer the adjusted subdistribution hazard ratio for prostate cancer mortality favoured surgery (1.76, 95% confidence interval 1.49 to 2.08, for radiotherapy v prostatectomy), whereas there was no discernible difference in treatment effect among men with metastatic disease. Subgroup analyses indicated more clear benefits of surgery among younger and fitter men with intermediate and high risk disease. Sensitivity analyses confirmed the main findings. Conclusions This large observational study with follow-up to 15 years suggests that for most men with non-metastatic prostate cancer, surgery leads to better survival than does radiotherapy. Younger men and those with less comorbidity who have intermediate or high risk localised prostate cancer might have a greater benefit from surgery.