Smallpox vaccination with replication deficient vaccinia strains such as Modified Vaccinia Ankara (MVA) may induce protective immunity with improved safety and tolerability profiles compared with currently available smallpox vaccines. Ninety subjects were randomized equally to six groups in a partially blinded, randomized, controlled clinical trial. IMVAMUNE^® (MVA-BN^®, Bavarian Nordic A/S, Kvistgård, Denmark) vaccine or placebo was administered at Study Days 0 and 28 by subcutaneous or intramuscular injection and five groups were challenged with Dryvax^® at study Day 112. Vaccination with two doses of IMVAMUNE^® was safe and well tolerated compared to Dryvax^®. IMVAMUNE^® produced comparable cellular and humoral immune responses to one dose of Dryvax^® and the immunity induced appears robust 90 days post-vaccination by evidence of attenuated primary cutaneous reaction responses following Dryvax^®. IMVAMUNE^® vaccination prior to Dryvax^® reduced virus replication at the Dryvax^® site, decreased the size of the primary cutaneous lesion, and decreased the time to healing but did not completely ameliorate the immune response.