Information about dementia prevalence in residential and nursing care homes helps these institutions to meet residents' needs. We combined residential characteristics ascertained at a screening interview in 1991-93 with dementia diagnoses from assessment interviews in the UK Medical Research Council Cognitive Function and Ageing Study, a population-based study of 13004 elderly people. Almost 5% of people aged 65 years or older lived in institutions--34% (95% CI 30-39) of individuals with dementia. Within institutions, dementia prevalence was 62% (52-71), and was slightly higher in women than in men, with no increase by age. That most residents have dementia has implications for the type of care that institutions provide.