Abstract Background Currently available pharmacological and non-pharmacological treatments have shown only modest effects in slowing the progression of dementia. Our objective was to assess the impact of a long-term non-pharmacological group intervention on cognitive function in dementia patients and on their ability to carry out activities of daily living compared to a control group receiving the usual care. Methods A randomized, controlled, single-blind longitudinal trial was conducted with 98 patients (follow-up: n = 61) with primary degenerative dementia in five nursing homes in Bavaria, Germany. The highly standardized intervention consisted of motor stimulation, practice in activities of daily living, and cognitive stimulation (acronym MAKS). It was conducted in groups of ten patients led by two therapists for 2 hours, 6 days a week for 12 months. Control patients received treatment as usual. Cognitive function was assessed using the cognitive subscale of the Alzheimer's Disease Assessment Scale (ADAS-Cog), and the ability to carry out activities of daily living using the Erlangen Test of Activities of Daily Living (E-ADL test) at baseline and after 12 months. Results Of the 553 individuals screened, 119 (21.5%) were eligible and 98 (17.7%) were ultimately included in the study. At 12 months, the results of the per protocol analysis (n = 61) showed that cognitive function and the ability to carry out activities of daily living had remained stable in the intervention group but had decreased in the control patients (ADAS-Cog: adjusted mean difference: -7.7, 95% CI -14.0 to -1.4, P = 0.018, Cohen's d = 0.45; E-ADL test: adjusted mean difference: 3.6, 95% CI 0.7 to 6.4, P = 0.015, Cohen's d = 0.50). The effect sizes for the intervention were greater in the subgroup of patients (n = 50) with mild to moderate disease (ADAS-Cog: Cohen's d = 0.67; E-ADL test: Cohen's d = 0.69). Conclusions A highly standardized, non-pharmacological, multicomponent group intervention conducted in a nursing-home setting was able to postpone a decline in cognitive function in dementia patients and in their ability to carry out activities of daily living for at least 12 months. Trial Registration http://www.isrctn.com Identifier: ISRCTN87391496