Background: Aging and physical inactivity are associated with declines in physical fitness and cognitive function. Active video games have proven to be beneficial for the physical health of older adults, but the exact effect of active video games on physical fitness and cognitive function was still unclear. Based on self-determination theory (SDT), which is a widely used theory of healthy behavior change, this study aimed to explore the effects of an active video game intervention on fitness and cognitive function in older adults. Methods: A total of 38 participants (mean age = 65.68 ± 3.78 years, 24 female) were randomly assigned to either an intervention group (active video game training) or a control group (no additional intervention). The participants in the intervention group trained for a total of 36 sessions (3 times per week for 50–55 min each) for 12 weeks. The control group continued with their normal daily living. The pre- and posttest measurements included: IPAQ-C score and physical fitness (BMI, body fat percent, blood pressure, reaction time, sit and reach, vital capacity, grip strength, static balance, blood biochemical tests for liver function, kidney function, blood lipids, glucose and insulin levels) and cognitive functions (processing speed, spatial ability, working memory, language ability, associative memory). Result: The intervention group showed a significantly smaller decrease in total average physical activity relative to the control group. BMI, vital capacity, systolic blood pressure, diastolic blood pressure, and spatial cognition significantly improved after training in the intervention group (BMI: F = 9.814, p = 0.004, d = −0.93, vital capacity: F = 4.708, p = 0.038, d = 0.67, systolic blood pressure: F = 5.28, p = 0.028, d = −0.68, diastolic blood pressure: F = 6.418, p = 0.016, d = −0.86, spatial cognition: F = 8.261, p = 0.007, d = 0.72). Three measures of static balance (closed eyes) also showed improvements after training (total length of swing: F = 3.728, d = −0.62, total velocity of swing: F = 3.740, d = −0.62, total area of swing: F = 2.920, d = −0.70). No significant training effects were evident in the results from the blood biochemical tests. Conclusion: This study indicates a positive influence of active video game training on physical fitness and cognitive function. The use of SDT-based active video game exercise as a feasible, safe, and effective training method for improving community older adults’ healthy, promoting group cohesion, and increasing motivation to exercise.