BACKGROUND: Balance dysfunction and falls are common problems in later stages of dementia. Exercise is a well-established intervention to reduce falls in cognitively intact older people, although there is limited randomised trial evidence of outcomes in people with dementia. The primary objective of this study is to evaluate whether a home-based balance exercise programme improves balance performance in people with mild to moderate severity Alzheimer's disease. METHODS/DESIGN: Two hundred and fourteen community dwelling participants with mild to moderate severity Alzheimer's disease will be recruited for the randomised controlled trial. A series of laboratory and clinical measures will be used to evaluate balance and mobility performance at baseline. Participants will then be randomized to receive either a balance training home exercise programme (intervention group) from a physiotherapist, or an education, information and support programme from an occupational therapist (control group). Both groups will have six home visits in the six months following baseline assessment, as well as phone support. All participants will be re-assessed at the completion of the programme (after six months), and again in a further six months to evaluate sustainability of outcomes. The primary outcome measures will be the Limits of Stability (a force platform measure of balance) and the Step Test (a clinical measure of balance). Secondary outcomes include other balance and mobility measures, number of falls and falls risk measures, cognitive and behavioural measures, and carer burden and quality of life measures. Assessors will be blind to group allocation. Longitudinal change in balance performance will be evaluated in a sub-study, in which the first 64 participants of the control group with mild to moderate severity Alzheimer's disease, and 64 age and gender matched healthy participants will be re-assessed on all measures at initial assessment, and then at 6, 12, 18 and 24 months. DISCUSSION: By introducing a balance programme at an early stage of the dementia pathway, when participants are more likely capable of safe and active participation in balance training, there is potential that balance performance will be improved as dementia progresses, which may reduce the high falls risk at this later stage. If successful, this approach has the potential for widespread application through community based services for people with mild to moderate severity Alzheimer's disease. TRIAL REGISTRATION: The protocol for this study is registered with the Australian New Zealand Clinical Trials Registry (ACTRN12608000040369).