The effectiveness and safety of yokukansan (TJ-54), a traditional Japanese medicine (kampo) for the treatment of the behavioural and psychological symptoms of dementia (BPSD), were evaluated in 106 patients diagnosed as having Alzheimer's disease (AD) (including mixed-type dementia) or dementia with Lewy bodies. Patients were randomly assigned to group A (TJ-54 treatment in period I and no treatment in period II; each period lasting 4 wk) or group B (no treatment in period I and TJ-54 treatment in period II). BPSD and cognitive functions were evaluated using the Neuropsychiatric Inventory (NPI) and the Mini-Mental State Examination (MMSE), respectively. Activities of daily living (ADL) were evaluated using Instrumental Activities of Daily Living (IADL) in outpatients and the Barthel Index in in-patients. For the safety evaluation, adverse events were investigated. Significant improvements in mean total NPI score associated with TJ-54 treatment were observed in both periods (Wilcoxon test, p=0.040 in period I and p=0.048 in period II). The mean NPI scores significantly improved during TJ-54 treatment in groups A and B (p=0.002 and p=0.007, respectively) but not during periods of no treatment. Among the NPI subscales, significant improvements were observed in delusions, hallucinations, agitation/aggression, depression, anxiety, and irritability/lability. The effects of TJ-54 persisted for 1 month without any psychological withdrawal symptoms in group A. TJ-54 did not show any effect on either cognitive function or ADL. No serious adverse reactions were observed. The present study suggests that TJ-54 is an effective and well-tolerated treatment for patients with BPSD.