Purpose: Previous research in specific locales indicates that individuals admitted to rural nursing homes have lower care needs than individuals admitted to nursing homes in urban areas, and that rural nursing homes differ in their mix of short-stay and chronic-care residents. This research investigates whether differences in acuity are a function of differences in resident payer status and occur for both individuals admitted for short stays, with Medicare as payer, and those needing chronic care. Design and Methods: We used a representative 10% sample of national resident assessments (Minimum Data Set) for calendar year 2000 (N = 197,589). We conducted statistical analyses (means, percentages, and logistic regression) to investigate differences in Medicare and non-Medicare admissions to facilities in metropolitan and nonmetropolitan areas. Results: Non-Medicare residents admitted to rural nursing facilities have lower acuity scores than non-Medicare residents admitted to metropolitan nursing homes. However, individuals admitted under Medicare were similar in rural and urban areas. Implications: Differences in resident acuity at admission among facilities in different locales were largely a function of lower acuity levels for individuals admitted to rural nursing homes for long-term or chronic care, although differences in Medicare census also played some role in facility-level differences in acuity. Other factors must be explored to determine why this lower acuity occurs and whether higher use of rural nursing homes by less impaired older persons meets their needs and preferences and represents good public policy. (Contains 5 tables.)