Background and aims: Decreased physical functioning and increased risk of fall are among the most common age-related problems among elderly people. This study aimed at assessing the effects of tai chi exercise on gait speed (GS) and fall rate among a group of elderly women in Iran. Methods: This randomized controlled trial was conducted in 2018. Participants were sixty elderly women purposefully selected from comprehensive healthcare centers in Lahijan, Iran, and randomly assigned to an intervention and a control group. Study intervention was Yang-style tai chi exercise implemented in two group sessions per week for twelve consecutive weeks. GS was assessed before and after the intervention using the short physical performance battery and fall rate was assessed using a researcher-made self-report fall assessment checklist. The SPSS program for Windows (v. 18.0) was employed for data analysis at a significance level of less than 0.05. Results: Between-group differences respecting the pretest and the posttest GS were not statistically significant (P>0.05). Moreover, posttest fall rate in the intervention group was less than the control group. Conclusion: Tai chi exercise is effective in increasing GS and reducing fall rate among elderly women and is recommended for elderly people.