CONTEXT: Home environmental interventions (EIs) and assistive technology (AT) devices have the potential to increase independence for community-based frail elderly persons, but their effectiveness has not been demonstrated. OBJECTIVE: To evaluate a system of AT-EI service provisions designed to promote independence and reduce health care costs for physically frail elderly persons. DESIGN: Randomized controlled trial. SETTING AND PARTICIPANTS: A total of 104 home-based frail elderly persons living in western New York were assigned to 1 of 2 groups (52 treatment, 52 control). INTERVENTION: All participants underwent a comprehensive functional assessment and evaluation of their home environment. Participants in the treatment group received AT and EIs based on the results of the evaluation. The control group received "usual care services." MAIN OUTCOME MEASURES: Functional status as measured by the Functional Independence Measure (FIM) and the Craig Handicap Assessment and Reporting Technique; pain as measured by the Functional Status Instrument; and health care costs. RESULTS: After the 18-month intervention period, the treatment groups showed significant decline for FIM total score and FIM motor score, but there was significantly more decline for the control group. Functional Status Instrument pain scores increased significantly more for the control group. In a comparison of health care costs, the treatment group expended more than the control group for AT and EIs. The control group required significantly more expenditures for institutional care. There was no significant difference in total in-home personnel costs, although there was a large effect size. The control group had significantly greater expenditures for nurse visits and case manager visits. CONCLUSION: The frail elderly persons in this trial experienced functional decline over time. Results indicate rate of decline can be slowed, and institutional and certain in-home personnel costs reduced through a systematic approach to providing AT and EIs.