This study investigated the effects of Tai Chi exercise on the psychological health and sleep quality of older adult women after exercise cessation. Nineteen Tai Chi practitioners and 20 controls completed the final tests. All participants completed the Profile of Mood States (POMS) and the Pittsburgh Sleep Quality Index (PSQI) at 0, 24 and 28 weeks (4 weeks after Tai Chi cessation). Compared with baseline, the fatigue, depression, total mood disturbance and PSQI scores in the Tai Chi group decreased at week 24 by 18.8%, 24.7%, 5.7% and 24.6%, and the vigour score increased by 18.3%. At week 28, depression and PSQI scores in the Tai Chi group decreased by 24.0% and 20.4%, respectively. Practicing Tai Chi for 24 weeks positively affected fatigue, depression, vigour and sleep quality among older adult women. The effect on reducing depression and improving sleep quality was sustained 4 weeks after Tai Chi was stopped.