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It has been shown in several studies that regular aerobic exercise increases brain volume in aging humans. The changes were observed in hippocampus and were correlated with dramatic reduction of age-related dementia. Interestingly, the intensity of training had little influence on the results: walking, climbing stairs, gardening were just as effective at reducing dementia as more strenuous exercise.

What is the biological mechanism behind this phenomena?

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Fig. The aerobic exercise group showed an increase in the anterior hippocampus and no change in the posterior hippocampus.[1]

  1. Erickson et al. Exercise training increases size of hippocampus and improves memory. PNAS. 2011.
  2. Colcombe et al. Aerobic exercise training increases brain volume in aging humans. J Gerontology. 2006
  3. Ravaglia, et al. Physical activity and dementia risk in the elderly. Neurology. 2008
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up vote 9 down vote accepted

Well, Erickson et al (2011) attribute the increase in brain volume in the aerobic exercise group to brain-derived neurotrophic factor (BDNF).

Specifically (p. 3020):

In fact, we found here that changes in serum BDNF levels were associated with changes in anterior hippocampal volume; an important link because the hippocampus is rich in BDNF, and BDNF levels increase with exercise treatments in both rodents and humans. BDNF is a putative mediator of neurogenesis and contributes to dendritic expansion and is also critical in memory formation. Our results suggest that cell proliferation or increased dendritic branching might explain increased hippocampal volume and improvements in memory after exercise

with the caveat:

however, increased vascularization (15, 16, 33) and dendritic complexity (34) may also be contributing to increased volume

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