OBJECTIVES: To examine the incremental effect of dementia-related problem behaviors (DRPBs) on the risk of and time to nursing home placement (NHP) in poor, frail, demented older people. DESIGN: Client assessments were reviewed retrospectively for clinical, functional, and cognitive information, particularly the presence of DRPBs and the time during enrollment at which they occurred. SETTING: The Georgia Community Care Services Program (CCSP), a Medicaid 1915-C home and community-based services program (HCBS). PARTICIPANTS: A random sample of demented clients (n = 204) discharged during fiscal year 1996 from four CCSP regions. MEASUREMENTS: The risk of and time to nursing home placement. Cox proportional hazards models and an extended Cox model with a time-varying covariate for the presence of DRPBs were used to evaluate the risk factors associated with NHP in demented older people. Kaplan-Meier survival curves were used to estimate the time to NHP for several risk groups. RESULTS: In demented older people in a HCBS program, having a DRPB was found to increase the hazard rate of NHP. Having a problem behavior shortened average median survival in the community by approximately 2 years. CONCLUSIONS: DRPBs in demented older people shorten the time to NHP. Exploration of effective interventions is warranted.