The garden, which stimulates all five senses, includes scented flowers, wind chimes, water features and herbs that crackle under foot.
It was the idea of Chris Rowlands, the charge nurse who runs the home.
Before the garden was developed, it boasted just a solitary patch of daffodils.
But Mr Rowlands said a course he attended outlined the benefits of a sensory garden for patients with dementia.
He took the ideas back to Bredon House, home to 19 dementia sufferers at Bupa's Court House care home in Malvern, Worcestershire.
Transformation
With the help of colleagues and gardener John Whitehead, he transformed the garden at a cost of just £3,000.
Mr Rowlands told BBC News Online: "Before we built this, it was unsafe and residents were unable to walk out there."
The garden has mock orange flowers - which as their name suggests smell fruity - lilac, honeysuckle and jasmine.
Thyme is built into cracks in the patio so that it crackles when residents walk on it, releasing the scent of the herb.
Mr Rowlands said: "One of the consequences of Alzheimer's Disease is that people wander, now they can wander in this garden.
"It helps them relax."
He said research was being carried out into the effects of aromatherapy on dementia, with jasmine recognised as being effective in calming agitation.
The garden, developed over three months earlier this year, has also been designed so that wherever residents sit, they are facing into the garden so they do not feel enclosed.
The garden is open to the public, and it is hoped other local dementia groups will be able to enjoy it.