To investigate why older people with high support needs entered residential care and who made that decision. Longitudinal study in three New Zealand cities. Participants: older people (n = 144); (unpaid) caregivers (n = 47); service co-ordinators (n = 12); multidisciplinary team members (n = 4). Questionnaires: InterRAI Minimum Data Set Assessments Home Care; Caregiver Reaction Assessment; Mastery and control. Semi-structured interview questions focussing on decision-making, and concerns that might result in residential care entry. Interviews were at baseline and 6 months, or on entering residential care. Significant factors were found, which increased the likelihood of residential care entry for older people. These included: high scoring dependency on the instrumental activities of daily living (IADL) scale, and an adult child living some distance away. The evidence from the study participant groups highlighted contrasting views about who was important in the decision making about entry to residential care. Older people who had moved into residential care generally thought that doctors had played a key role, whereas family members and professionals tended to consider the move was the caregiver’s decision. Older people with good levels of knowledge about services and support, and good housing, were more likely to continue to live in the community. Policy makers and funders need to understand the importance of clear communication, information and appropriate support services for older people who wish to remain at home, and their caregivers.