During aging, musical activities can help maintain physical and mental health and cognitive abilities, but their rehabilitative use has not been systematically explored in persons with dementia (PWDs). Our aim was to determine the efficacy of a novel music intervention based on coaching the caregivers of PWDs to use either singing or music listening regularly as a part of everyday care. Eighty-nine PWD-caregiver dyads were randomized to a 10-week singing coaching group (n = 30), a 10-week music listening coaching group (n = 29), or a usual care control group (n = 30). The coaching sessions consisted primarily of singing/listening familiar songs coupled occasionally with vocal exercises and rhythmic movements (singing group) and reminiscence and discussions (music listening group). In addition, the intervention included regular musical exercises at home. All PWDs underwent an extensive neuropsychological assessment, which included cognitive tests, as well as mood and quality of life (QOL) scales, before and after the intervention period and 6 months later. In addition, the psychological well-being of family members was repeatedly assessed with questionnaires. Compared with usual care, both singing and music listening improved mood, orientation, and remote episodic memory and to a lesser extent, also attention and executive function and general cognition. Singing also enhanced short-term and working memory and caregiver well-being, whereas music listening had a positive effect on QOL. Regular musical leisure activities can have long-term cognitive, emotional, and social benefits in mild/moderate dementia and could therefore be utilized in dementia care and rehabilitation. © The Author 2013. Published by Oxford University Press on behalf of The Gerontological Society of America. All rights reserved. For permissions, please e-mail: journals.permissions@oup.com.