Although the positive effects of exercise on the well-being and quality of independent living for older adults are well accepted, many elderly individuals lack access to exercise facilities, or the skills and motivation to perform exercise at home. To provide a more engaging environment that promotes physical activity, various fitness applications have been proposed. Many of the available products, however, are geared toward a younger population and are not appropriate or engaging for an older population. To address these issues, we developed an automated interactive exercise coaching system using the Microsoft Kinect. The coaching system guides users through a series of video exercises, tracks and measures their movements, provides real-time feedback, and records their performance over time. Our system consists of exercises to improve balance, flexibility, strength, and endurance, with the aim of reducing fall risk and improving performance of daily activities. In this paper, we report on the development of the exercise system, discuss the results of our recent field pilot study with six independently living elderly individuals, and highlight the lessons learned relating to the in-home system setup, user tracking, feedback, and exercise performance evaluation.