OBJECTIVE The purpose of this article is to explore how the introduction of Medicare Part D is changing the operations of long-term-care pharmacies (LTCPs) and nursing homes, as well as implications of those changes for nursing home residents. METHODS We reviewed existing sources of information and interviewed stakeholders across various perspectives. We conducted 31 semistructured telephone interviews with key stakeholders between November 2006 and January 2007. RESULTS Part D represents a substantial departure from how prescription drugs were previously financed and administered in nursing homes, and nursing home providers and LTCPs have struggled in adapting to some of these changes. Part D increased the variation around formularies and drug management processes for residents at the facility level, creating additional burden on clinical and pharmacy staff and introducing a tension between facilities' need to dispense medications quickly and assuring of coverage for those drugs. Nursing home and LTCP stakeholders perceive wide variation across Part D plans in their ability to meet the needs of nursing home residents. CONCLUSIONS Although LTCPs, nursing homes and their clinicians, and Part D plans will gain experience with the benefit in the nursing home setting over time, stakeholders we interviewed identified a range of longer term issues and questions that merit attention as the benefit proceeds.