Purpose: The purpose was to identify the effects of a Tai Chi exercise program on physical fitness, fall related perception and health status among institutionalized elderly. Methods: A quasi-experimental research was carried out with a nonequivalent control group pretest-posttest design. There were 23 subjects in the experimental group and 24 in the control group. The data was gathered by structured questionnaires about fall related perception, and health status. Physical fitness was measured by an exercise therapist with a blind principle. Results: At the completion of the 12 weeks Tai Chi exercise program, flexibility (F=4.50, p=.00), and ability to balance (F=3.27, p=.00) had increased significantly. Fall related perception showed significant improvement in the fear of falling (F=-3.52, p=.00). Physical functioning (F=3.38, p=.00), role limitation-physical (F=2.67, p=.01), role limitation-emotional (F=2.47, p=.02). and general health (F=3.88, p=.00) in health status showed significant differences between the two groups. Conclusion: The study findings revealed Tai Chi exercise as a useful nursing intervention for elderly that enhances flexibility and balance, decreases fall related perception and also increases the health status. Further research is warranted to compare the potential effects of Tai Chi exercise and its health benefits from other types of exercise or martial arts.