BACKGROUND: Cognitive rehabilitation (CR) is an individualised, person-centred intervention for people with mild to moderate dementia that addresses the impact of cognitive impairment on everyday functioning. OBJECTIVES: To determine whether or not CR is a clinically effective and cost-effective intervention for people with mild to moderate Alzheimer's disease or vascular or mixed dementia, and their carers. DESIGN: This multicentre randomised controlled trial compared CR with treatment as usual (TAU). Following a baseline assessment and goal-setting to identify areas of everyday functioning that could be improved or better managed, participants were randomised (1 : 1) via secure web access to an independent randomisation centre to receive either TAU or CR and followed up at 3 and 9 months post randomisation. SETTING: Community. PARTICIPANTS: Participants had an , Tenth Edition, diagnosis of Alzheimer's disease or vascular or mixed dementia, had mild to moderate cognitive impairment (Mini Mental State Examination score of ≥ 18 points), were stable on medication if prescribed, and had a family carer who was willing to contribute. The exclusion criteria were people with a history of brain injury or other neurological disorder and an inability to speak English. To achieve adequate power, we needed 350 people to complete the trial, with 175 people in each trial arm. INTERVENTION: Cognitive rehabilitation consisted of 10 therapy sessions over 3 months, followed by four maintenance sessions over 6 months, delivered in participants' homes. The therapists were nine occupational therapists and one nurse. OUTCOME MEASURES: The primary outcome was self-reported goal attainment at 3 months. Goal attainment was also assessed at 9 months. Carers provided independent ratings of goal attainment at both time points. The secondary outcomes were participant quality of life, mood, self-efficacy and cognition, and carer stress, health status and quality of life. The assessments at 3 and 9 months were conducted by researchers who were blind to the participants' group allocation. RESULTS: A total of 475 participants were randomised (CR arm,  = 239; TAU arm,  = 236), 427 participants (90%) completed the trial and 426 participants were analysed (CR arm,  = 208, TAU arm,  = 218). At 3 months, there were statistically significant large positive effects for participant-rated goal attainment [mean change in the CR arm: 2.57; mean change in the TAU arm: 0.86; Cohen's = 0.97, 95% confidence interval (CI) 0.75 to 1.19], corroborated by carer ratings (Cohen's = 1.11, 95% CI 0.89 to 1.34). These effects were maintained at 9 months for both the participant ratings (Cohen's  = 0.94, 95% CI 0.71 to 1.17) and the carer ratings (Cohen's  = 0.96, 95% CI 0.73 to 1.20). There were no significant differences in the secondary outcomes. In the cost-utility analyses, there was no evidence of cost-effectiveness in terms of gains in the quality-adjusted life-years (QALYs) of the person with dementia (measured using the DEMentia Quality Of Life questionnaire utility score) or the QALYs of the carer (measured using the EuroQol-5 Dimensions, three-level version) from either cost perspective. In the cost-effectiveness analyses, by reference to the primary outcome of participant-rated goal attainment, CR was cost-effective from both the health and social care perspective and the societal perspective at willingness-to-pay values of £2500 and above for improvement in the goal attainment measure. There was no evidence on the cost-effectiveness of the self-efficacy measure (the Generalized Self-Efficacy Scale) from either cost perspective. LIMITATIONS: Possible limitations arose from the non-feasibility of using observational outcome measures, the lack of a general measure of functional ability and the exclusion of people without a carer or with rarer forms of dementia. CONCLUSIONS: Cognitive rehabilitation is clinically effective in enabling people with early-stage dementia to improve their everyday functioning in relation to individual goals targeted in the therapy sessions. FUTURE WORK: Next steps will focus on the implementation of CR into NHS and social care services and on extending the approach to people with rarer forms of dementia. TRIAL REGISTRATION: Current Controlled Trials ISRCTN21027481. FUNDING: This project was funded by the National Institute for Health Research (NIHR) Health Technology Assessment programme and will be published in full in ; Vol. 23, No. 10. See the NIHR Journals Library website for further project information.