Background: Foot problems are prevalent in older adults, which may increase the risk and concern for falls. Ankle-foot orthoses (AFO) have been shown to be effective in the stabilization of lower extremities, but their long-term effectiveness in improving balance and their potential to encourage older adults to become more physically active are still debated. Objective: This randomized controlled trial investigated the effectiveness of daily use of a custom-made AFO on balance, fear of falling, and physical activity in older adults. Study Design: Forty-four older adults with concern about or at risk for falling were randomly allocated to either the control group (CG; 77.3% female, age 75.6 ± 6.5 years, BMI 29.3 ± 6.4) or the intervention group (IG; 63.6% female, age 73.7 ± 6.3 years, BMI = 27.8 ± 4.8). The IG received walking shoes and bilateral custom-made AFO. The CG received only walking shoes. At the baseline and 6-month follow-ups, balance and physical activity were assessed using validated wearable instrumentation and fear of falling was assessed using the Fall Efficacy Scale-International (FES-I). Adherence and acceptability toward wearing the AFO were assessed using self-reported questionnaires at the 6-month follow-up. Results: No significant between-group difference was observed at baseline (p = 0.144–0.882). Compared to baseline and the CG, hip, ankle, and center-of-mass (COM) sways were significantly reduced at the 6-month follow-up in the IG while standing with the feet together during the eyes-open condition (p = 0.005–0.040). Within the IG, the FES-I was reduced significantly (p = 0.036) and there was an increasing trend in the number of walking bouts with a medium effect size (d = 0.52, p = 0.440) compared to baseline. However, there were no significant changes in FES-I and physical activity measures in the CG (p = 0.122–0.894). The reduction in COM sway in the IG was moderately correlated with adherence (r = –0.484, p = 0.047) and strongly correlated with baseline COM sway (r = –0.903, p < 0.001). Conclusion: Results suggest that bilateral custom-made AFO plus walking shoes is effective in improving balance compared to walking shoes alone, and it significantly reduces the fear of falling, with a nonsignificant but noticeable positive trend in physical activity, compared to baseline. The results also suggest that older adults with poor balance at baseline and higher daily adherence to using the AFO will gain more benefit from the AFO intervention.