To investigate factors associated with residents’ choice of type of Medicaid-funded community residential care setting in western Washington State. Method: Prospective cohort design including residents new to any of three setting types (264 residents entering 170 different facilities), using data from state and Medicaid databases and in-person interviews. The authors used analysis of variance and multinomial logistic regression to examine bivariate associations and estimate effects of resident and facility characteristics on choice of facility type at baseline. Results: Several resident characteristics appear to be associated with choice of community residential care setting, including age, marital status, education, functional status, and reported memory and behavior problems. Facility policies differ significantly among types of facilities and also appear to be associated with choice of setting. Discussion: Selection processes operate in choice of community residential care setting, with residents choosing facility type based on the fit of their needs with facility characteristics.