This longitudinal study of 196 caregiver/care receiver dyads was undertaken to determine the variables predictive of caregiver decision to institutionalize a dependent with dementia. Seven variables (use of services, enjoyment of caregiving, caregiver burden and health, caregiver rating and reaction to care receiver behavior and memory problems, and presence of troublesome behaviors) predicted the decision to institutionalize. Six variables (caregiver health and burden, use of services, care receiver cognitive function and troublesome behaviors, and caregiver reaction to behaviors) predicted actual institutionalization at 18 months.