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This study investigated the effect of facility and resident characteristics on the use of antipsychotic medications in the long-term care setting.This research used data available from the On-Line Survey and Certification of Automated Records (OSCAR) for all Medicare/Medicaid-certified nursing homes in the contiguous United States in 1997. The data consisted of 14,631 facilities.A multiple linear regression model was used to determine the effects of selected facility and resident characteristics on antipsychotic drug use while simultaneously controlling for the effects of resident characteristics and stratifying by ownership type. β-Coefficients provided measures of effect and represented the per-unit change in the prevalence of antipsychotic use corresponding to the per-unit change in each independent variable.In for-profit facilities, both the presence of special care units and mental health professionals were associated with increased antipsychotic use (β = 1.70, SE = 0.23; β = 0.24, SE = 0.17, respectively), while other facility factors such as increasing size, being part of a chain, and higher occupancy rate were associated with decreased antipsychotic drug use. In the nonprofit environment, facility characteristics (eg, increasing occupancy rate, certified nurses’ aides per 100 beds) were associated with decreasing antipsychotic use. Increasing percentages of residents covered by Medicare, those with dementia, and residents with mental retardation (β = 0.05, SE = 0.01; β = 0.03, SE = 0.01; β = 0.08, SE = 0.08, respectively) were predictive of increased drug use.Facility and resident characteristics are associated with use of antipsychotic medications, although the extent to which these factors explain variability in use of antipsychotics may vary on the basis of the underlying financial incentives of the institution.