This study investigated the effects of inhalation aromatherapy on sleep disturbance in elderly individuals with dementia. In 19 subjects, normal sleep was observed for a 20-day control period, inhalation aromatherapy was then applied for a 20-day intervention period, and the control and intervention periods were compared. During the intervention period, essential oils were placed nightly on towels around the subjects’ pillows. The measured sleep conditions were sleep latency, total sleep time, sleep efficacy, duration of the longest sustained sleep period, wake time after sleep onset, early morning awakening, total daytime sleep, and the Neuropsychiatric Inventory. Total sleep time was significantly longer in the intervention period than in the control period (p<0.05). The duration of the longest sustained sleep period was significantly longer in the intervention period than in the control period (p<0.05). Early morning awakening in the intervention period was significantly less compared to that in the control period (p<0.05). Total daytime sleep could not be adequately measured and was omitted from the analysis. No significant differences in other sleep conditions were observed. These results indicated positive effects of inhalation aromatherapy on symptoms of sleep disturbance in elderly individuals with dementia.