Factors predicting the early institutionalization of demented patients were studied in 143 outpatients using univariate and multivariate life-table methods. Four types of factors were evaluated for prognostic value: severity of functional impairment, behavioral disorders, individual patient characteristics, and type of caregiver. After follow-up of 19 +/- 12 months, 51 patients had been institutionalized. Increased global severity of dementia, the presence of troublesome and disruptive behaviors, and incontinence increased the likelihood of institutionalization. The best predictors of institutionalization were paranoia, aggressive behavior, and incontinence. Neither individual patient characteristics (age, education, and gender) nor caregiver relationship to the patient (male spouse, female spouse, and male or female child) influenced institutionalization. Since troublesome behavioral disorders are potentially treatable aspects of dementia leading to institutionalization, their management should be a major focus of therapy in dementia.