Objectives: This longitudinal study explores whether the working situation (no change in working hours despite care, reduction of working hours due to care or not working) moderates mental and physical health of informal caregivers of older people with Alzheimer's disease (AD) in Italy. Methods: Data from a sample of 146 caregivers of older people with moderate AD involved in the UP-TECH trial across three waves were analysed. Multivariate analyses were used to study the association between independent variables (caregivers' work situation) and dependent variables (caregivers' psycho-physical health). In a second model, elements relating to the caregiver, the cared-for individual and the caregiving situation were added as controls. Results: Being forced to reduce working hours due to care tasks or not being employed independently from care was negatively associated with informal caregiver's physical health, compared with working carers not experiencing reduction of working hours. In the extended model, this result was confirmed. In comparison with working carers not forced to reduce working hours, non-working carers experienced higher levels of caregiver burden and depression, however these results were not confirmed in the adjusted model. Other factors also emerged as important including weekly hours of care, the cared-for older individual's ADL/IADL scores and informal support network. Conclusions: Given the positive effect of labour force participation on health of informal caregivers of older people with AD, policy makers should promote their employment avoiding their forced reduction of working hours, while also putting measures in place to decrease the intensity of informal care provision.