Little is known about the factors responsible for the institutionalization of the elderly. This study's objective was to discover markers associated with nursing home placement. Fifty-six white ambulatory women over 63 yrs of age were selected from 3 settings encompassing a range of dependency: 20 women from nursing homes; 16 women who lived in their own homes but requiring social assistance and 20 totally independent women. Each woman was examined for factors that might be associated with her state of dependency: age, socioeconomic status, morale, education, strength of social network, number and type of medications, mental status, manual ability, medical problems and abnormalities on physical examination. The time required to perform any of 27 manual skills discriminated the 3 groups better than any other factor (P less than 0.0001). Three manual skills predicted group membership with 92% accuracy. Manual ability may be the best marker of dependency in elderly women and should be measured in studies concerned with geriatric health status.