Background. There are very few studies that have integrated the opinions of nursing home residents and their families into the process of developing valid outcome measures for the quality of life in long-term care facilities. Purpose. The objective of this study was to identify the interpersonal and environmental characteristics for the best substitute living environment, as perceived by recently (< 6 months) and not as recently (> 6 months of residency) admitted residents and their families. Methods. A qualitative research approach was used with 27 elderly residents and families from five nursing homes. Results. Of the 11 quality of life indicators identified by the participants, the three most important ones were being treated with respect, sympathetic involvement in relationships, and perceived competency through technical (nursing) acts and attitudes. Practice Implications. As nursing home residents age, substitute homes have to adapt if they are to continue offering opportunities for self-actualization and a continuing sense of identity. Opinions of elderly residents and their families are very helpful for occupational therapists particularly when designing programs in long-term care facilities.