Older adults with disabilities increasingly are entering residential care alternatives to nursing homes. This study used Medicare Current Beneficiary Survey data for 1992-1998 to compare the characteristics of nursing home and alternative facilities and residents.The proportion of elders in alternative residential care settings increased from 0.8% in 1992 to 1.3% in 1998, and characteristics of facilities and their residents suggest that alternative settings are caring for a more disabled clientele over time.Blacks, long under-represented in nursing homes, increased as a proportion of nursing home residents, but growth in alternative settings was disproportionately among whites and others. Further research is needed to understand the implications of these trends.