Some successful fall prevention programs include resistance or balance training, but less is known about the effects of low-intensity resistance exercise with moderate vascular occlusion (LIO) on physical function in healthy elderly people. In LIO, appropriate pressure is applied to the proximal parts of the upper and lower extremities with a specially designed belt. The reduction of muscle blood flow is considered likely to induce the secretion of growth hormone. The aim of this study was to compare the effects of two training programs, LIO versus dynamic balance exercise (DBE) in elderly people in a community. Fifty-one healthy subjects aged 65 and older were randomly assigned to the LIO program (n = 24) or the DBE program (n = 27). Performance, balance, muscle strength were measured in both groups before and after the 8-week programs. In addition, blood was sampled from LIO participants (n = 11) and analyzed for growth hormone and lactate. Overall improvements, but no group differences, were found in performance and balance after the programs. Muscle strength in the lower extremities was significantly increased in the LIO group, but not in the DBE group. Growth hormone was significantly increased immediately after LIO. The 8-week LIO program improved physical function, especially muscle strength, which may be associated with the exercise-induced secretion of growth hormone. Further studies are needed to determine the contents and duration of an LIO program for elderly people.