Aim Yokukansan (YKS), a traditional herbal medicine, has been used to treat behavioral and psychological symptoms of dementia (BPSD). The present study is the first double‐blind, randomized, placebo‐controlled trial to determine the efficacy and safety of YKS for the treatment of BPSD in Alzheimer's disease (AD). Methods A total of 22 sites consisting of clinics, hospitals and nursing homes participated. A total of 145 patients with AD were randomized. Active YKS (7.5 g/day) and placebo were supplied to 75 and 70 participants, respectively. The primary outcome measure was the 4‐week change in total score of the Neuropsychiatric Inventory Brief Questionnaire Form (NPI‐Q), an instrument that evaluates BPSD. Secondary outcome measures included 12‐week changes in NPI‐Q scores, changes in NPI‐Q subcategory scores and total scores of the Mini‐Mental‐State Examination. Results Four‐week changes in NPI‐Q total scores did not differ significantly between the treatment and placebo groups. There were also no significant differences between groups in 12‐week changes in total NPI‐Q scores, NPI‐Q subcategory scores or total Mini‐Mental‐State Examination scores. However, a subgroup with fewer than 20 points on the Mini‐Mental‐State Examination at baseline showed a greater decrease in “agitation/aggression” score in the YKS group than in the placebo group (P = 0.007). No serious adverse effects were observed during the study. Conclusions Our data did not reach statistical significance regarding the efficacy of YKS against BPSD; however, YKS improves some symptoms including “agitation/aggression” and “hallucinations” with low frequencies of adverse events. Geriatr Gerontol Int 2017; 17: 211–218