South Carolina Community Long-Term Care (CLTC) data were used to identify factors increasing the risk of institutionalization in people with dementia. Clients diagnosed with dementia and observed at least twice between June 1993 and December 1994 (N = 786) were studied. Logistic regression determined that clients with a decline in ADL function who were white, had a nonrelative or child as a caregiver, and were diagnosed with Alzheimer's disease were at increased risk of institutionalization. Identifying CLTC clients at increased risk of institutionalization could be useful in designing additional interventions to prevent institutionalization or in planning the transition to institutional care.