A number of different intervention programmes have been described in the literature for caregivers of people with dementia, but the nature of intervention has varied widely. The aim of the present study was to evaluate the efficacy of psychosocial intervention on family caregiver's level of burden and satisfaction, and possible influence of the caregiver's relationship and health and the patient's severity of the disease on the effects of intervention. All persons, 70 years and older, from two districts of a municipality (2721 individuals) who were in receipt of any form of social services were invited to participate in a screening of cognitive decline, and 1656 home visits were made. Those with symptoms of cognitive decline, and having a family caregiver, were invited for a further medical examination. Data were analysed from 308 family caregivers: 153 caregivers who underwent intervention and 155 control caregivers who did not. Repeated measures were carried out 6 and 12 months later. Outcomes were measured using instruments that had been tested for reliability and validity, and all patients were diagnosed according to DSM-IV dementia criteria. Caregivers who underwent the psychosocial intervention (5-week programme and 3-month conversation group) reported significantly lower strain and disappointment after 6 months, and this trend remained after 12 months. Satisfaction, measured in terms of purpose, increased in the intervention group and decreased in the control group. The best effect on caregivers in the intervention group was found early in the progression of dementia and in caregivers with impaired health. These findings emphasize the importance of identifying family caregivers early in the caring process to optimize well-being. This study demonstrates that psychosocial intervention with a clearly defined aim that includes giving information and having a conversation group have significant, positive effects on burden and satisfaction for caregivers of people with dementia.