Late life deterioration of functional status is associated with adverse health outcomes and increased cost of care. This trial was conducted to determine whether dance-based intervention could reverse functional decline among nursing home (NH) residents. A total of 189 residents of seven NHs in the Czech Republic were randomly assigned to intervention and control groups. More detailed data were collected in a subsample of 52 participants. Intervention consisted of 3-month dance-based exercise. Functional status was assessed by the get-up-and-go test, basic activities of daily living (ADL), instrumental activities of daily living (IADL), and senior fitness tests (SFTs). Participants in the control group experienced a significant decline in get-up-and-go test, IADL, and in four of the six SFTs. The intervention proved to be effective in preventing this deterioration and improved chair stand test and chair sit-and-reach test. The findings indicate that a relatively simple dance-based exercise can slow down deterioration of functional status in NH residents.