Objectives We reported the findings of a randomized controlled trial (RCT) to examine the effects of an individualized functional enhancement program (FEP) on functional skills and mood symptoms in mild and moderate dementia. Subjects & Methods 74 Chinese older persons with dementia were recruited into a skills training program by occupational therapists (OT). Thirty seven subjects were trained with an individualized selection of daily activities (FEP Intervention, I); 37 were trained with general occupational therapy (Control, C). The FEP comprised of twice weekly group sessions of skills training and problem solving using cognitive behavioral approach. Results At 1 month after completion of program, both I and C subjects showed an improvement in process skills of the assessment of motor and process skills (AMPS)(paired t‐tests, p < 0.05). At 4 months post‐program, the I group showed a further reduction of cornell scale for depression in dementia (CSDD) scores (paired t‐test, p = 0.02); Apathy improved at 1 month post‐training (p = 0.04), but deteriorated at 4 months (p = 0.01). Group differences in changes of mood and functional scores were not significant (ANVOCA, p > 0.05). Conclusions The findings suggested a potential benefit for individualized occupational therapy. It should be tailor made with individual needs and continued for sustained effectiveness. Copyright © 2009 John Wiley & Sons, Ltd.