Background We aimed to estimate the clinical effectiveness of Community Occupational Therapy for people with dementia and family carers–UK version (Community Occupational Therapy in Dementia–UK version [COTiD-UK]) relative to treatment as usual (TAU). We hypothesised that COTiD-UK would improve the ability of people with dementia to perform activities of daily living (ADL), and family carers’ sense of competence, compared with TAU. Methods and findings The study design was a multicentre, 2-arm, parallel-group, assessor-masked, individually randomised controlled trial (RCT) with internal pilot. It was conducted in 15 sites across England from September 2014 to January 2018. People with a diagnosis of mild to moderate dementia living in their own home were recruited in pairs with a family carer who provided domestic or personal support for at least 4 hours per week. Pairs were randomised to either receive COTiD-UK, which comprised 10 hours of occupational therapy delivered over 10 weeks in the person with dementia’s home or TAU, which comprised the usual local service provision that may or may not include standard occupational therapy. The primary outcome was the Bristol Activities of Daily Living Scale (BADLS) score at 26 weeks. Secondary outcomes for the person with dementia included the following: the BADLS scores at 52 and 78 weeks, cognition, quality of life, and mood; and for the family carer: sense of competence and mood; plus the number of social contacts and leisure activities for both partners. Participants were analysed by treatment allocated. A total of 468 pairs were recruited: people with dementia ranged from 55 to 97 years with a mean age of 78.6 and family carers ranged from 29 to 94 with a mean of 69.1 years. Of the people with dementia, 74.8% were married and 19.2% lived alone. Of the family carers, 72.6% were spouses, and 22.2% were adult children. On randomisation, 249 pairs were assigned to COTiD-UK (62% people with dementia and 23% carers were male) and 219 to TAU (52% people with dementia and 32% carers were male). At the 26 weeks follow-up, data were available for 364 pairs (77.8%). The BADLS score at 26 weeks did not differ significantly between groups (adjusted mean difference estimate 0.35, 95% CI −0.81 to 1.51; p = 0.55). Secondary outcomes did not differ between the groups. In total, 91% of the activity-based goals set by the pairs taking part in the COTiD-UK intervention were fully or partially achieved by the final COTiD-UK session. Study limitations include the following: Intervention fidelity was moderate but varied across and within sites, and the reliance on primarily proxy data focused on measuring the level of functional or cognitive impairment which may not truly reflect the actual performance and views of the person living with dementia. Conclusions Providing community occupational therapy as delivered in this study did not improve ADL performance, cognition, quality of life, or mood in people with dementia nor sense of competence or mood in family carers. Future research should consider measuring person-centred outcomes that are more meaningful and closely aligned to participants’ priorities, such as goal achievement or the quantity and quality of activity engagement and participation.