Background: Humor therapy is a non-pharmacological intervention with potential to improve mood and quality of life for institutionalized older persons, including those with dementia. The primary aims of the Sydney Multisite Intervention of LaughterBosses and ElderClowns (SMILE) are to examine the effects of humor therapy on residents' mood, quality of life, social engagement, and agitation. Methods: SMILE is a single-blinded cluster-randomized controlled trial where 398 consented residents in 35 residential aged care facilities will be allocated to receive humor therapy or usual care. Residents allocated to the intervention group will engage in humor therapy with professional performers (ElderClowns) and trained facility staff (LaughterBosses) for a minimum of nine two-hour sessions over 12 weeks as well as engaging humorously with LaughterBosses during the course of daily care. The usual care control group will not engage in any formal humor therapy. Researchers, blind to treatment allocation, will assess residents at baseline (week 0), post-intervention (week 13), and follow-up (week 26). The measurement suite includes the Cornell Scale for Depression in Dementia, the Dementia Quality of Life Scale, the Multidimensional Observation Scale for Elderly Subjects, the Cohen-Mansfield Agitation Inventory, and the Neuropsychiatric Inventory. Observations of residents' engagement will be recorded at each humor therapy session. Conclusions: SMILE is the first large rigorous study of humor therapy in aged care. © International Psychogeriatric Association 2012.