Based on qualitative interviews with 14 nursing home residents and 13 caregivers, this article explores how elders adapted to life in a nursing home, and how their caregivers came to embrace nursing home placement as the optimal way to meet their elders' need for care. These processes were mediated by two mechanisms: the function the institution fulfilled for residents and their caregivers, and the coping strategies residents used to adapt to institutional living. The wide variety of elders' psycho-emotional coping strategies can best be summarized as accommodation, resignation, and resistance which translate into a number of behaviors. However, there was no typical or neat movement from resistance to resignation followed by accommodation. Instead, residents pulled from their repertoire of coping strategies the ones that served them best in a given situation and in a way that allowed them to express simultaneously satisfaction and discontent, compromise and adjustment. Clark and Anderson's (1967) model of adaptation proved useful for understanding participants' struggle to come to terms with life in the nursing home. (Contains 1 table.)