OBJECTIVE to determine the environmental quality of community-based residential and nursing care for people with dementia. METHODS survey of a stratified random sample of care homes. METHODS forty-six registered residential and nursing homes in a single health district. METHODS scales for the assessment of environments for people with dementia, including care practices, social activities, social facilities, reality orientation cues, physical condition and space availability. RESULTS over 90% of the homes had high quality scores on at least two measures. Provision of reality orientation cues was usually poor. Nursing homes catering specifically for 'the elderly mentally infirm' had more restrictive care practices, whilst local-authority residential homes had a better provision of recreational facilities. Private sector homes were in much better condition than public sector homes but their care practices were more institutional--this may be related to the provision of nursing and elderly mentally infirm care almost exclusively by the private sector. CONCLUSIONS the environmental quality of community-based residential care is generally good, but improvements could be made, particularly with reality orientation cues.