The physical and social environments are recognized as important therapeutic tools in the care of nursing home residents with dementia, yet little is known about the environments of rural nursing homes. This study was conducted in one rural health authority (16,000 km[superscript 2]) in the province of Saskatchewan. Long-term institutional care was provided in seven small (15 to 35 beds), publicly funded nursing homes, none of which had separate dementia special care units (SUCs). The Physical Environmental Assessment Protocol (PEAP) was used to evaluate the facilities on nine key dimensions of dementia care environments. Facilities were most supportive in "provision of privacy" and least supportive on "maximizing awareness and orientation." Focus groups were conducted with registered nurses, nursing aides, and activity workers. Staff caregivers identified six special needs of residents with dementia that were difficult to meet in the nursing homes, two of which were related to the physical environment (safety and a calm, quiet environment) and four of which were related to the social environment (meaningful activity and one-to-one contact, opportunity to use remaining abilities, flexible policy, and knowledgeable caregivers who enjoy working with persons with dementia). Staff suggested separate dementia SCUs as one approach to managing dementia care but also identified challenges in creating dementia units in small rural facilities. Results provide support for conceptual models of dementia care settings that emphasize the interaction of organizational, social, and physical factors. (Contains 3 tables.) [Abstract provided in both French and English.]