Long-term evidence for the effectiveness and cost-effectiveness of collaborative dementia care management (CDCM) is lacking. To evaluate whether 6 months of CDCM is associated with improved patient clinical outcomes and caregiver burden and is cost-effective compared with usual care over 36 months. This was a prespecified secondary analysis of a general practitioner (GP)-based, cluster randomized, 2-arm clinical trial conducted in Germany from January 1, 2012, to December 31, 2014, with follow-up until March 31, 2018. Participants were aged 70 years or older, lived at home, and screened positive for dementia. Data were analyzed from March 2011 to March 2018. The intervention group received CDCM, comprising a comprehensive needs assessment and individualized interventions by nurses specifically qualified for dementia care collaborating with GPs and health care stakeholders over 6 months. The control group received usual care. Main outcomes were neuropsychiatric symptoms (Neuropsychiatric Inventory [NPI]), caregiver burden (Berlin Inventory of Caregivers' Burden in Dementia [BIZA-D]), health-related quality of life (HRQOL, measured by the Quality of Life in Alzheimer Disease scale and 12-Item Short-Form Health Survey [SF-12]), antidementia drug treatment, potentially inappropriate medication, and cost-effectiveness (incremental cost per quality-adjusted life year [QALY]) over 36 months. Outcomes between groups were compared using multivariate regression models adjusted for baseline scores. A total of 308 patients, of whom 221 (71.8%) received CDCM (mean [SD] age, 80.1 [5.3] years; 142 [64.3%] women) and 87 (28.2%) received usual care (mean [SD] age, 79.2 [4.5] years; 50 [57.5%] women), were included in the clinical effectiveness analyses, and 428 (303 [70.8%] CDCM, 125 [29.2%] usual care) were included in the cost-effectiveness analysis (which included 120 patients who had died). Participants receiving CDCM showed significantly fewer behavioral and psychological symptoms (adjusted mean difference [AMD] in NPI score, -10.26 [95% CI, -16.95 to -3.58]; P = .003; Cohen d, -0.78 [95% CI, -1.09 to -0.46]), better mental health (AMD in SF-12 Mental Component Summary score, 2.26 [95% CI, 0.31-4.21]; P = .02; Cohen d, 0.26 [95% CI, -0.11 to 0.51]), and lower caregiver burden (AMD in BIZA-D score, -0.59 [95% CI, -0.81 to -0.37]; P < .001; Cohen d, -0.71 [95% CI, -1.03 to -0.40]). There was no difference between the CDCM group and usual care group in use of antidementia drugs (adjusted odds ratio, 1.91 [95% CI, 0.96-3.77]; P = .07; Cramér V, 0.12) after 36 months. There was no association with overall HRQOL, physical health, or use of potentially inappropriate medication. The CDCM group gained QALYs (0.137 [95% CI, 0.000 to 0.274]; P = .049; Cohen d, 0.20 [95% CI, -0.09 to 0.40]) but had no significant increase in costs (437€ [-5438€ to 6313€] [US $476 (95% CI, -$5927 to $6881)]; P = .87; Cohen d, 0.07 [95% CI, -0.14 to 0.28]), resulting in a cost-effectiveness ratio of 3186€ (US $3472) per QALY. Cost-effectiveness was significantly better for patients living alone (CDCM dominated, with lower costs and more QALYs gained) than for those living with a caregiver (47 538€ [US $51 816] per QALY). In this secondary analysis of a cluster randomized clinical trial, CDCM was associated with improved patient, caregiver, and health system-relevant outcomes over 36 months beyond the intervention period. Therefore, it should become a health policy priority to initiate translation of CDCM into routine care. ClinicalTrials.gov Identifier: NCT01401582.