Long-term care organizations are facing rapid environmental changes given recent market and policy changes, which include the implementation of the Balanced Budget Act (BBA; 1997), the growthof managed care, the increased number of nursing home alternatives, and nurse staffing shortages. Using survey data, this study examined urban and/or rural differences in the environment perceptions across long-term care provider types in Pennsylvania: nursing homes, home health agencies, and assisted living facilities. In addition, it analyzed how long-term care organizations have responded to the implementation of the BBA (1997). Results show that urban and rural long-term care providers have similarities and differences in their environmental perceptions and in their response to environmental changes. Workforce issues were identified almost universally by rural and urban facilities as the critical industry problem. On the other hand, there were also differences, with rural nursing home providers showing the greatest vulnerability among long-term care organizations. © 2007 The Southern Gerontological Society.