OBJECTIVE: To examine the contextual attributes that influence nursing home TQM adoption, as informed by resource dependence and institutional theories. DATA SOURCES: A survey of licensed nursing home administrators in the Commonwealth of Pennsylvania during 1994-1995, the Medicare and Medicaid Annual Certification Survey (MMACS) data file, and the Area Resource File (ARF). STUDY DESIGN: Because the dependent variable (TQM adoption vs. non-adoption) is dichotomous, the model was estimated using logistic regression. DATA COLLECTION: Of the 615 facilities that were mailed surveys, 241 (39.2%) returned completed questionnaires. No significant differences were observed between respondents and nonrespondents in size, for-profit status, system membership, registered nurse staffing, cited licensure deficiencies, Medicare census, or Medicaid census. PRINCIPAL FINDINGS: Perceived competition, Medicare's share of total hospital discharges in the market, and facility Medicare census were significant predictors of TQM adoption. CONCLUSIONS: Our results provide limited support for the association between some rational adaptive and institutional factors and TQM adoption in nursing homes. Perceived competition and the influence of the Medicare program both at the facility and the market level are associated with TQM adoption. However, other factors associated with TQM adoption in other industries, such as size, are not associated with TQM adoption in the nursing homes in this study.