Background: There is good evidence of the positive effects of person-centered care (PCC) on agitation in dementia. We hypothesized that a person-centered environment (PCE) would achieve similar outcomes by focusing on positive environmental stimuli, and that there would be enhanced outcomes by combining PCC and PCE. Methods: 38 Australian residential aged care homes with scope for improvement in both PCC and PCE were stratified, then randomized to one of four intervention groups: (1) PCC; (2) PCE; (3) PCC +PCE; (4) no intervention. People with dementia, over 60 years of age and consented were eligible. Co-outcomes assessed pre and four months post-intervention and at 8 months follow-up were resident agitation, emotional responses in care, quality of life and depression, and care interaction quality. Results: From 38 homes randomized, 601 people with dementia were recruited. At follow-up the mean change for quality of life and agitation was significantly different for PCE (p = 0.02, p = 0.05, respectively) and PCC (p = 0.0003, p = 0.002 respectively), compared with the non-intervention group (p = 0.48, p = 0.93 respectively). Quality of life improved non-significantly for PCC+PCE (p = 0.08), but not for agitation (p = 0.37). Improvements in care interaction quality (p = 0.006) and in emotional responses to care (p = 0.01) in PCC+PCE were not observed in the other groups. Depression scores did not change in any of the groups. Intervention compliance for PCC was 59%, for PCE 54% and for PCC+PCE 66%. Conclusion: The hypothesis that PCC+PCE would improve quality of life and agitation even further was not supported, even though there were improvements in the quality of care interactions and resident emotional responses to care for some of this group. The Australian New Zealand Clinical Trials Registry Number is ACTRN 12608000095369.