Purpose: The purpose of our study was to evaluate the effects of an exercise program on activities of daily living (ADL), balance and cognition in elderly individuals with Alzheimer’s disease and vascular dementia. Methods: Thirty-two patients with mild to moderate cognitive impairment were assigned to one of two groups: an exercise group (n=16) and a control group (n=16). The exercise group carried on regular exercise for 60 minutes a day, 4-5 times per week for 8 weeks. The exercise group participated in an exercise program (treadmill training and physical training). ADL, balance and cognitive function were evaluated before and at the end of the program using the Korean modified Bathel Index (K-MBI), the Functional independence measure (FIM), the Berg balance scale (BBS), the Balance performance monitor (BPM), and the Mini mental state examination (MMSE) in both groups. Results: There were significant exercise-induced improvements in ADL and Balance from pre to post tests; but not in MMSE. Conclusion: Exercise programs can improve ADL and balance in elderly with Alzheimer’s disease and vascular dementia.