Purpose: The purpose of this study was to examine the effects of Tai Chi exercise on muscle strength, balance, flexibility and bone mineral density among community dwelling elderly women. Methods: A quasi-experimental pretest-posttest design with a nonequivalent comparison group was utilized, Elderly women were recruited from the community settings and assigned to either the treatment group (n=30) or the comparison group (n=34). Both groups completed the pretest and the posttest measures at six months with an 29.7% of dropouts. Tai Chi exercise was performed for 60 minutes, three times a week for 24 weeks. The study participants were referred to the sports clinic of the university hospital where an exercise therapist and a technician measured muscle strength, balance, flexibility, and bone mineral density without the knowledge of the group assignment. Data were collected from June 14, 2010 to May 27, 2011. Results: At the completion of 6 month Tai Chi exercise, the experimental group showed a significant difference in knee flexor strength (t=3.26 p=.002), flexibility (t=-2.93, p=.005), and bone mineral density in femur (t=2.20, p=.032), compared to the control group. Conclusion: Tai Chi exercise could be performed safely to community dwelling elderly women and effective for preventing declining in physical function in this population. Whether or not this health benefits would lead fall prevention will require further study.