This study clarifies the impact of changes in the physical environment and the introduction of downsizing care in a medical institution for disabled children. The targeted facility was surveyed for over three years through behavioral observation, before and after it was rebuilt. Additionally, a questionnaire survey was conducted with the staff. The results show that: (1) the staff and two groups of children (self‐moving difficulty and self‐movable groups) often spent time in different places initially, but gradually spent more time in the same place, especially within a common space; (2) the postures of the children gradually diversified and became more relaxed in the new facility; (3) the postures of the staff rarely changed except in the common spaces where they became more relaxed; (4) as the staff spent considerable time in the same place as the children, they felt that the frequency of staying close to and interacting with the children and noticing their changes had increased; and (5) the increase in the number and size of seating areas was appreciated by and impacted the children and staff; however, the staff did not appreciate the entire seating area and the spaces nearby.