Cognitive impairment is frequent in elderly subjects. It is associated with motor impairment, a limitation in quality of life and frequently, institutionalization. The aim of this work is to test the efficacy of a therapeutic group program based on action-observation learning. Methods: a non-randomized controlled trial study was conducted. We included 40 patients with cognitive impairment from a nursing home who were categorized into mild and moderate cognitive impairment and divided separately into a control and experimental group. Experimental group performed a 4-week group work, in which each patient with mild cognitive impairment was paired with a patient with moderate cognitive impairment. Thus, patients with mild cognitive impairment observed a series of functional exercises performed by their peers and replicated them. Simultaneously, the patients with moderate cognitive impairment replicated the movement after observing it performed by a patient with mild cognitive impairment. The control group continued to receive their usual care at the center. The upper limb function, cognitive level and function in basic activities of human daily life were measured before and after the intervention and compared with the control group. Results: statistically significant differences were found in the functionality of basic activities of daily living, in the functionality of the upper limb and in the cognitive level in all patients in the experimental group regardless of the initial cognitive level. No statistically significant differences were found in the control group. Conclusions: the implementation of a group, peer-based, action-observation learning therapeutic program is effective in improving the basic activities of human daily life, cognitive level and upper limb functionality in patients with mild and moderate dementia.