Objectives The purpose of this study was to determine the factors related to changes in the burden of caregivers who look after the elderly at home, as well as factors related to the institutionalization of the elderly who require care. The types of care services associated with reducing caregivers' burden and continuing in-home care were also studied. Methods The study subjects were adults aged C65 years who used the services of in-home care management centres located in Osaka Prefecture, Japan, and their caregivers. This 2-year longitudinal study began in October 2007, with a total of three surveys undertaken once a year. The survey methods included self-administered questionnaires and the review of clinical records. Results Dementia and its accompanying behavioural disturbances were found to be significantly related to the increased burden of caregivers and the institutionalization of those requiring care. A significantly higher proportion of caregivers with an increasing burden or those who maintained a high level of burden used day care services compared to those in the other groups. Conclusion Preventive intervention against dementia and its accompanying behavioural disturbances should be considered in the day care service to reduce caregivers' burden and to decrease institutionalization.