Physical activity can have a positive impact on cognition and well-being in older people. This article reviews and evaluates the effects of planned physical activity programmes on mood, sleep and functional ability in people with dementia. A total of 27 studies between 1974 and 2005 were found. Of these, four included participants living at home, two involved participants who were living either at home or in care homes and 21 included participants living solely in care homes. Since psychosocial intervention can reduce family caregiver burden, the break down of home-care and associated rates of institutionalization, the indirect effects of these physical activity programmes on the family caregiver are also explored. The scope for developing physical activity programmes for people with dementia in primary care using families and volunteers is discussed. © 2006, Sage Publications. All rights reserved.