This study examined the administration of psychotropic medication to Medicaid recipients who resided continuously in an Illinois nursing home during 1984. Of these residents, 20,037 (60%) received at least one such medication during the year, with administration most likely for those from the ages of 45 to 74 years. Haloperidol, thioridazine, and flurazepam were the most frequently prescribed drugs of those examined. The study also investigated the relationship of demographic and institutional variables to the probability of drug administration and the amount administered. These variables were most strongly related to the probability of antipsychotic, antiparkinson, and antimanic (lithium) administration. The association of these variables with the amount of drug administered was strongest for antimanic and antipsychotic medications, particularly the latter. In all analyses, the addition of institutional variables increased goodness of fit minimally over that produced by demographic variables alone. This finding supports the conclusion that the prescription of psychotropic medication is more influenced by individual patient characteristics than by the nature of the institutional setting in which the patient resides.