CONTEXT: Because Tai Chi (TC) is beneficial to elders without cognitive impairment (CI), it also may benefit elders with CI. But elders with CI have generally been excluded from TC studies because many measurement tools require verbal reports that some elders with CI are unable to provide. OBJECTIVES: To test the efficacy of a TC program in improving pain and other health outcomes in community-dwelling elders with knee osteoarthritis (OA) and CI. METHODS: This pilot cluster-randomized trial was conducted between January 2008 and June 2010 (ClinicalTrials.gov Identifier: NCT01528566). The TC group attended Sun style TC classes, three sessions a week for 20 weeks; the control group attended classes providing health and cultural information for the same length of time. Measures included the Western Ontario and McMaster Universities Osteoarthritis Index (WOMAC) pain, physical function and stiffness subscales; the Get Up and Go test; the Sit-to-Stand test; and the Mini-Mental State Examination (MMSE), administered at baseline, every four weeks during the intervention and at the end of the study (post-test). RESULTS: Eight sites participated in either the TC group (four sites, 28 participants) or control group (four sites, 27 participants). The WOMAC pain (P = 0.006) and stiffness scores (P = 0.010) differed significantly between the two groups at post-test, whereas differences between the two groups in the WOMAC physical function score (P = 0.071) and the MMSE (P = 0.096) showed borderline significance at the post-test. WOMAC pain (P = 0.001), physical function (P = 0.021), and stiffness (P ≤ 0.001) scores improved significantly more over time in the TC group than in controls. No adverse events were found in either group. CONCLUSION: Practicing TC can be efficacious in reducing pain and stiffness in elders with knee OA and CI.