Racial differences in predictors of institutionalization were studied in a biracial North Carolina cohort (n = 4074). During 3 years of follow-up, 8.5% of Whites and 6.4% of African Americans were admitted to nursing homes. African Americans were one half as likely as Whites to be institutionalized after adjustment for other risk factors. Among Whites, impaired activities of daily living and cognition were the strongest predictors; among African Americans, impaired instrumental activities of daily living and prior history of nursing home use were strongest. Racial differences in nursing home use were not explained by financial and social support or physical and cognitive impairment.