Purpose of the Study: To estimate the prevalence of culture change practice in U.S. nursing homes (NHs) and examine how state Medicaid policies may be associated with this prevalence. Design and Methods: In 2009/2010, we conducted a survey of a stratified proportionate random sample of NH directors of nursing (DONs) and administrators (NHAs) at 4,149U.S. NHs; contact was achieved with 3,695. Cooperation rates were 62.6% for NHAs and 61.5% for DONs. Questions focused on NH (physical) environment, resident-centered care, and staff empowerment domains. Domain scores were created and validated, in part, using qualitative interviews from 64 NHAs. Other NH covariate data were from Medicare/Medicaid surveys (Online Survey, Certification and Reporting), aggregated resident assessments (Minimum Data Set), and Medicare claims. Medicaid policies studied were a state’s average NH reimbursement rate and pay-for-performance (P4P) reimbursement (including and not including culture change performance measures). Multivariate generalized ordered logit regressions were used. Results: Eighty-five percent of DONs reported some culture change implementation. Controlling for NH attributes, a $10 higher Medicaid rate was associated with higher NH environment scores. Compared with NHs in non-P4P states, NHs in states with P4P including culture change performance measures had twice the likelihood of superior culture change scores across all domains, and NHs in other P4P states had superior physical environment and staff empowerment scores. Qualitative interviews supported the validity of survey results. Implications: Changes in Medicaid reimbursement policies may be a promising strategy for increasing culture change practice implementation. Future research examining NH culture change practice implementation pre-post P4P policy changes is recommended.