How will the Western World manage to master the implications of the demographic change? The answer to this may be Ambient Assisted Living (AAL) that becomes the topic of this research study. The aim of the research is to present the field of AAL with relation to home care. Furthermore, the work of the European Union (EU) in the field of AAL is presented as the EU is a major key player in enhancing research on AAL solutions that help meeting the demands of the future. Moreover, a categorization scheme of AAL solutions is developed through research evidence. Additionally, characteristics of a successful innovation given by the Diffusion of Innovations theory by E. M. Rogers are used to identify challenges for the diffusion process of AAL. Eventually, knowledge and evidence from the research conducted is used to give recommendations for the future concerning the diffusion and research directions of AAL.