Although only 5% of the total over 65 population in developed countries lives in a care home, the lifetime risk of needing residential care is considerable. In the UK, 418 000 older people occupy nearly 12 000 care homes; the sector has a total value of around £14 billion. Care home residents tend to be very old, most are women, and most have complex co-morbid needs. Most people enter a care home because they can no longer live independently due to ill health, notably dementia. Dementia affects over two thirds of all residents; physical disability and functional impairment are also common. Behavioural disturbance is common as is depression. There are concerns about excessive reliance on medication, and more emphasis recently has been placed on improving standards of care. Evidence suggests that training and good leadership is effective. With the ageing population, the provision and the funding of care home places will come under increasing pressure. The solutions to this are yet to be determined.