This chapter examines aspects of health and dependency of older people, quality of life research generally, and some studies of quality of life in residential and nursing homes. Numerous studies have demonstrated a gradient of dependency for vulnerable older people between care settings such as home care, residential homes, nursing homes and hospital wards. Although there is a considerable overlap in the dependency of residents in residential and nursing homes, older people entering nursing homes are on average more dependent than those entering residential homes. As might be expected, there is a higher prevalence of disease in older people than in any other age group and the situation is further complicated by the presence of multiple pathology, increased severity, co-morbidity of mental and physical illness and iatrogenic disorders. The most common psychiatric illnesses encountered in older people are delirium, dementia and depression.