Hospitalization of nursing home residents is costly and potentially exposes residents to iatrogenic disease and psychological harm. This article critically reviews the association between the decision to hospitalize and factors related to the residents' welfare and preferences, the providers' attitudes, and the financial implications of hospitalization. Regarding the resident's welfare, factors associated with hospitalization included sociodemographics, health characteristics, nurse staffing, the presence of ancillary services, and the use of hospices. Patient preferences (e.g., advance directives) and provider attitudes (e.g., overburdening of staff) were also associated with increased hospitalization. Finally, financial variables related to hospitalization included nursing home ownership status and state Medicaid policies, such as nursing home payment rates and bed-hold requirements. Most studies relied on potentially confounded research designs, which leave open the issue of selection bias. Nevertheless, the existing literature asserts that nursing home hospitalizations are frequent, often preventable, and related to facility practices and state Medicaid policies.