Older patients with medical illnesses are at risk of institutionalization. The purpose of this study is to investigate the factors leading to institutionalization in older patients after recovery from medical illnesses. We studied 535 older patients in two convalescence hospitals in Hong Kong. Of them, 116 patients (21.7%) needed to move to nursing homes upon discharge. Univariate analysis showed that age, single/divorced/widowed status, longer length of stay, pressure sores, urinary incontinence, urinary catheterization, falls, dementia, diabetes mellitus, Barthel index (100), Elderly Mobility Score (EMS), Chinese version of the mini-mental state examination (C-MMSE) and albumin levels were significant factors associated with institutionalization. Multivariate analysis showed that being single/divorced/widowed (odds ratio=OR=2.74, 95% confidence interval=CI=1.36-5.53, p=0.0048), having urinary incontinence on discharge (OR=5.13, CI=2.66-10.6, p<0.001) and admission due to falls (OR=2.4, CI=1.03-5.57, p=0.04) were independent risk factors for nursing home admission. Higher admission EMS (OR=0.91, CI=0.84-0.97, p=0.009), admission C-MMSE (OR=0.93, CI=0.87-0.98, p=0.019), and discharge albumin levels (OR=0.93, CI=0.88-0.99, p=0.02) were independent protecting factors against nursing home admission. Knowledge of these factors can allow us to predict accommodation outcome and develop intervention strategy to reduce institutionalization in the older patients.