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This study examined the impact of the actual environment on changes in psychological adjustment over time. According to Self-Determination Theory (SDT; Deci and Ryan, Intrinsic motivation and self-determination in human behavior, 1985a, Plenum, New York; J Res Pers 19:109–134, 1985b; Psychol Inq 11:227–268, 2000), environments that are objectively supportive of autonomy should facilitate psychological adjustment through their impact on people's subjective perceptions of autonomy and self-determined motivation. The present study tested this hypothesis using a prospective design with nursing homes residents. Results from structural equation modeling showed that actual autonomy-supportive nursing home environments were positively associated with residents' perceptions of autonomy that in turn predicted self-determined motivation in major life domains. Self-determined motivation, in turn, predicted increases in psychological adjustment over a one-year period. Theoretical implications of the present findings are discussed in line with SDT.