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The United States is adopting a resident assessment instrument nationwide that holds great potential for the measurement and improvement of nursing home quality. The steps necessary to ultimately use the assessment instrument to evaluate institutional quality at the facility level are discussed. Drawing from experience with a standardized resident assessment system used in Virginia since 1983, Anne Glass describes how assessments were employed in an exploratory project to examine the relative performance of 135 facilities. A model of nursing home quality is included to explain how indicators drawn from assessments relate to quality. Advantages of using a resident-assessment-based system to evaluate institutional quality are outlined. When computerized, this wealth of data will help clarify facility norms and support continuous quality improvement.