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Despite the new ‘needs driven’ criteria for public funded admission to nursing homes, there remains concern that older people are entering such care inappropriately. However, neither previous research or policy makers have sub‐divided such inappropriate entries into their constituent groups: those who are inappropriate because they are too independent and those who are inappropriate because they are too dependent. The aims of this study were to determine the extent of inappropriate nursing home admission amongst older people in nursing homes in six areas of England and Wales between 1995‐96. This was done through a retrospective case‐note review using a structured data‐collection pro forma. Although the study found no evidence of extensive inappropriate placement, extrapolation of these data suggests that 6,750 of those admitted to nursing care could have coped in a more independent environment. The inappropriately admitted group were more likely to have lived alone, be female, elderly and not to have seen a geriatrician. It is concluded that the most effective way to prevent such admissions would be to ensure the involvement of specialist geriatricians in the multidisciplinary team involved in admission decisions.