A host of interventions are now known to be helpful to alleviate subjective distress and improve well‐being in dementia caregivers. However, few intervention studies have focused on measures of physical health, and none have examined cortisol as an outcome—despite the fact that cortisol is regarded as a crucial biological intermediary by which chronic stress leads to disease. In this study, we examined demographic and psychosocial factors as predictors of salivary cortisol at a baseline assessment, among a sample of 175 Latino/Hispanic and Caucasian women caring for a family member with dementia. We also examined the influence of a cognitive–behaviour‐based psychoeducational intervention (Coping with Caregiving) on cortisol at a post‐treatment assessment, compared with a minimal support condition. Results revealed that caregivers with high intensity caregiving situations, characterized by long hours of care and co‐residence with the care recipient, tended to have less adaptive cortisol patterns. However, these ‘at‐risk’ caregivers benefited most from the Coping with Caregiving intervention and had more normal cortisol patterns at post‐treatment, compared with caregivers in the control condition. Copyright © 2011 John Wiley & Sons, Ltd.