Objective: to evaluate the effectiveness of a multifactorial intervention on incidence of falls in psychogeriatric nursing home patients. Design: cluster-randomised controlled 12-month trial. Setting: psychogeriatric wards in 12 nursing homes in The Netherlands. Participants: psychogeriatric nursing home patients (n = 518). Intervention: a general medical assessment and an additional specific fall risk evaluation tool, applied by a multidisciplinary fall prevention team, resulting in general and individual fall prevention activities. Measurements: falls. Results: there were 355 falls in 169.5 patient-years (2.09 falls per patient per year) in the intervention group and 422 falls in 166.3 patient-years (2.54 falls per patient per year) in the control group. Intention-to-treat analysis with adjustment for ward-related and patient-related parameters, and intra-cluster correlation, showed that the intervention group had a significantly lower mean fall incidence rate than the control group (rate ratio = 0.64, 95% CI = 0.43-0.96, P = 0.029). Subgroup analyses showed that fall risk declined further as patients participated longer in the intervention programme. Conclusion: the introduction of a structured multifactorial intervention to prevent falls in psychogeriatric nursing home patients significantly reduces the number of falls. This reduction is substantial and of high clinical relevance. © The Author 2009. Published by Oxford University Press on behalf of the British Geriatrics Society. All rights reserved.