Purpose: The purpose of this study was to examine the effect of physical activity program on sleep and behavior of institutionalized dementia patients. Method: Twenty six demented elderly who were known to suffer from problematic sleep and behavior were studied during a four-week protocol of one week of baseline and three weeks of treatment. All subjects were inpatients and the experiment was conducted in residential wards. Study design was one group repeated measurement study. For the first and fourth week of the study period, sleep patterns, subjective sleep quality by subjects and care givers were rated to evaluate sleep and agitation were observed using CMAI to evaluate behavior. Result: No significant difference on objective sleep variables and subjective sleep quality rated by caregivers were identified, on the contrary subjective sleep quality rated by subjects were different significantly. Total CMAI score was significantly declined after treatment. Conclusion: Physical activity program was effective for the problematic behavior of demented elderly while its efficacy for sleep remains in question. Repeated studies utilizing various intensity, duration, timing are needed to confirm these results.