Increasing evidence suggests that physical activity can prevent some aspects of mental illness in older people such as depression, dementia and Alzheimer's disease. Additionally, limited research has shown that engagement in structured exercise can improve aspects of psychological well-being such as mood and self-perceptions in older adults. However, the relationship between incidental daily activity such as walking or time spent sedentary, with psychological well-being has not been investigated. The Better Ageing Project provided an opportunity to assess well-being and quality of life using standardised questionnaires with 176 adults aged 70 and over. Accelerometry was used to objectively assess daily energy expended in physical activity at different levels of intensity. In addition, an assessment of the impact of the 12-month Better Ageing structured group exercise programme was assessed through questionnaires and interviews. Total daily physical activity energy expenditure (joules/day) and amount of time spent in activity of at least moderate intensity were weakly related (r = 0.20-0.28) to quality of life, subjective well-being and physical self-perceptions. Time spent sedentary (min/day) was weakly and negatively related to several mental health indicators. The quantitative data showed only minor psychological benefits of the exercise intervention. In contrast, interviews with 27 research participants and 4 exercise leaders suggested that important improvements in perceived function and social benefits had been experienced.