Context Placing a relative with dementia into a long-term care facility is common among caregivers. Placement transition and factors that affect caregiver health and well-being after placement of the patient are not well described. Objective To assess the impact of placing a relative with dementia in a long-term care facility on caregivers' health and well-being. Design, Setting, and Participants Prospective study from 1996 to 2000 of the placement transition in a sample of 1222 caregiver-patient dyads recruited from 6 US sites. A total of 180 patients were placed in a long-term care facility during the 18month follow-up period. Data collected before and after placement were analyzed to identify factors associated with placement, the nature of contact between caregivers and their institutionalized relatives after placement, and the relation of both of these factors to health outcomes among dementia caregivers. Main Outcome Measures Caregiver depression (symptoms on the Center for Epidemiological Studies-Depression [CES-D] scale; range, 0-60) and anxiety (State Trait Inventory; range, 10-40) and use of prescription medications for depression and anxiety. Results Caregivers who institutionalized their relative reported depressive symptoms and anxiety to be as high as they were while in-home caregivers. Overall CES-D scores for depression did not change from before to after placement (median [IQR], 15.0 [8-24.5] and 15.0 [7.7-28]; P=.64). Overall anxiety scores on the State Trait Inventory also did not change significantly (median [IQR], 22.0 [19-27] before vs 21.1 [18-27] after; P=.21). These effects were most pronounced among caregivers who were married to the patient (P=.02 for depression), visited more frequently (P=.01 for depression and PϽ.001 for anxiety), and were less satisfied with the help they received from others (P=.003 for depression and PϽ.001 for anxiety). The use of antidepressants did not change significantly before (21.1%) to after (17.9%) placement (P=.16). The use of anxiolytics before to after placement increased from 14.6% to 19% (P=.02), and nearly half of caregivers (48.3%) were at risk for clinical depression following placement of their relative. Conclusions The transition to institutional care is particularly difficult for spouses, almost half of whom visit the patient daily and continue to provide help with physical care during their visits. Clinical interventions that better prepare the caregiver for a placement transition and treat their depression and anxiety following placement may be of great benefit to these individuals.