Background: Falls are one of the most common health problems among older people and pose a major economic burden on health care systems. Exercise is an accepted stand-alone fall prevention strategy particularly if it is balance training or regular participation in Tai chi. Dance shares the 'holistic' approach of practices such as Tai chi. It is a complex sensorimotor rhythmic activity integrating multiple physical, cognitive and social elements. Small-scale randomised controlled trials have indicated that diverse dance styles can improve measures of balance and mobility in older people, but none of these studies has examined the effect of dance on falls or cognition. This study aims to determine whether participation in social dancing: i) reduces the number of falls; and ii) improves cognitive functions associated with fall risk in older people. Methods/design. A single-blind, cluster randomised controlled trial of 12 months duration will be conducted. Approximately 450 participants will be recruited from 24 self-care retirement villages that house at least 60 residents each in Sydney, Australia. Village residents without cognitive impairment and obtain medical clearance will be eligible. After comprehensive baseline measurements including physiological and cognitive tests and self-completed questionnaires, villages will be randomised to intervention sites (ballroom or folk dance) or to a wait-listed control using a computer randomisation method that minimises imbalances between villages based on two baseline fall risk measures. Main outcome measures are falls, prospectively measured, and the Trail Making cognitive function test. Cost-effectiveness and cost-utility analyses will be performed. Discussion. This study offers a novel approach to balance training for older people. As a community-based approach to fall prevention, dance offers older people an opportunity for greater social engagement, thereby making a major contribution to healthy ageing. Providing diversity in exercise programs targeting seniors recognises the heterogeneity of multicultural populations and may further increase the number of taking part in exercise. Trial registration. Australian New Zealand Clinical Trials Registry ACTRN12612000889853.The trial is now in progress with 12 villages already have been randomised.