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This qualitative study aimed to identify and describe the relatives' and staff's perceptions of environmental change on residents with dementia. Data were collected from audio-taped relative and staff focus group interviews at an aged care facility in Western Sydney. The transcribed data from the focus groups were thematically analysed and categorized. Three major categories emerged from the analysed data: the special care unit as a family home, therapeutic environment and work environment. Relatives and staff identified that the overall design of the unit impacted on the residents' functioning and quality of life, sense of freedom, level of agitation, sleeping patterns and weight. Relatives reported that the environment was conducive to visiting and to children, and staff reported that the working environment was improved because of its layout and equipment. This study has shown that special care units can make a difference to the quality of life of residents and improve conditions for relatives and staff.