There was no evidence of institutional abuse at Dunmurry Manor care home in Belfast, a watchdog said.
The regulator disagreed with parts of a scathing report by an elderly person's advocate which examined the care of those with dementia.
The conclusion that some were allegedly exposed to sexualised behaviour by fellow residents was presented in an unjustified fashion, the Regulation and Quality Improvement (RQIA) authority said.
It added: "RQIA does not agree with some of the Commissioner's conclusions.
"Most seriously, we found no evidence of institutional abuse and do not believe that the commissioner's findings support this statement."
The RQIA statement said it found instances where the quality of care was not to the expected standard and worked with the management of the home to support improvement.
Follow-up inspections found that care did get better for a period.
"We do not agree that this meets the definition of institutional abuse," RQIA said.
Commissioner for Older People for Northern Ireland (COPNI) Eddie Lynch has said the failure to put in place a robust process to protect female residents had violated their right to enjoy their home and private life.
Sexualised behaviour is not uncommon in those with dementia and is not regarded as criminal activity, the RQIA watchdog said.
It added: "In respect of the findings of resident-on-resident sexual assault, RQIA is very concerned at how the commissioner has chosen to present this finding.
"Disinhibited sexualised behaviour is not uncommon in people with dementia.
"For that reason, it is not regarded as criminal activity and is dealt with sensitively by health and social care trust safeguarding teams who work closely with care providers to mitigate risks to all residents and to develop care plans that recognise such behaviours as a potential expression of distress.