Physical exercise has been shown to increase brain volume and improve cognition in randomized trials of non-demented elderly. Although greater social engagement was found to reduce dementia risk in observational studies, randomized trials of social interventions have not been reported. A representative sample of 120 elderly from Shanghai, China was randomized to four groups (Tai Chi, Walking, Social Interaction, No Intervention) for 40 weeks. Two MRIs were obtained, one before the intervention period, the other after. A neuropsychological battery was administered at baseline, 20 weeks, and 40 weeks. Comparison of changes in brain volumes in intervention groups with the No Intervention group were assessed by t-tests. Time-intervention group interactions for neuropsychological measures were evaluated with repeated-measures mixed models. Compared to the No Intervention group, significant increases in brain volume were seen in the Tai Chi and Social Intervention groups (p < 0.05). Improvements also were observed in several neuropsychological measures in the Tai Chi group, including the Mattis Dementia Rating Scale score (p = 0.004), the Trailmaking Test A (p = 0.002) and B (p = 0.0002), the Auditory Verbal Learning Test (p = 0.009), and verbal fluency for animals (p = 0.01). The Social Interaction group showed improvement on some, but fewer neuropsychological indices. No differences were observed between the Walking and No Intervention groups. The findings differ from previous clinical trials in showing increases in brain volume and improvements in cognition with a largely non-aerobic exercise (Tai Chi). In addition, intellectual stimulation through social interaction was associated with increases in brain volume as well as with some cognitive improvements.