Applicants for a newly opened special unit for dementia sufferers were randomly allocated to full-time care in the unit or placed on a waiting list and offered periodic respite care in the meantime. All applicants were living in the community at the time of random assignment. Both groups were followed up for three months to assess the effects on the dementia sufferers and on their family care-givers. Care-givers initially had a high level of psychological symptoms, which was greatly reduced after admission of the dementia sufferer to full-time care. By contrast, the care-givers of the community care group of sufferers continued to have a high level of symptoms. Dementia sufferers continued to deteriorate with both forms of care, with little difference between the two groups. Admission of dementia sufferers to full-time care in a special unit appears to be of great benefit to the psychological health of their care-givers and has no adverse effects on the dementia sufferers themselves.