This study followed 321 community-based patients with documented dementias, 22% of whom were institutionalized after 1 year. Multivariate analyses indicated that none of the patient characteristics, such as level of cognitive, psychiatric, or neurological impairment, predicted institutionalization. Social psychological characteristics, type and number of caregivers, and subjective caregiver distress did predict which patients were ultimately institutionalized. Implications for treatment planning are discussed.