Falls are a serious consequence of declining physical function. Otago exercise is a strength and balance training program designed to prevent falls and enhance health status among the elderly. This study aimed to investigate the effect of a 12-week Otago exercise intended to reduce the risk of falls and health status among the elderly with chronic illness in the social elderly institution. This quasi-experimental study employed a pre- and post-test design using a control group. The study involved an intervention group (21 respondents) and a control group (21 respondents). The sample used in this study were elderly living in a social elderly institution. The sample was selected using simple random sampling. The datawere analyzed using Mann–Whitney test, independent t-test, and Chi-square test. Otago exercise significantly reducedthe respondents’ risk of falling and enhanced their health status. Significant differences were observed between the twogroups in terms of the risk of fall (p= 0.041) and health status (p= 0.011). Otago exercise significantly improves the health status and reduces the risk of falling among elderly with chronic illness. The exercise can be recommended for older adults with chronic illness in social elderly institutions and communities.