Parkinson’s disease (PD) is a neurodegenerative disease which gives a person a high risk of becoming care-dependent. During disease progression, the amount of care concerning activities of daily living can increase, possibly resulting in transition of the people with Parkinson’s disease (PwP) to a care facility. However, there is a lack of knowledge concerning the factors leading to institutionalization of PwP and the consequences for them and their informal caregivers. The aim of this cross-sectional retrospective study was to investigate reasons leading to the transition into an institutional care facility, the process of decision-making and its effects on PwP symptoms and caregiver burden. Participating PwP had to be institutionalized for at most one year after transition at study inclusion. Participants completed a range of semiquantitative questionnaires as well as the caregiving tasks questionnaire. Fourteen patient–caregiver pairs were included. PwP suffered from late-stage PD symptoms with high dependence on help, experiencing several hospitalizations before transition. Analyses revealed a significant decrease in caregiver burden and depressive symptoms of the caregivers after PwP institutionalization. Factors influencing the transition were, e.g., fear of PwP health issues and concerns about caregivers’ health. This study presents new insights into the process of institutionalization and its influence on caregiver burden, including aspects for discussions of physicians with PwP and their caregivers for counselling the decision to move to institutional care.