Reduction in competence makes older adults with dementia more sensitive to the influence of the physical environment. The aim of the longitudinal study was to examine whether residents with dementia in long-term facilities with variability in physical environmental characteristics in Vancouver (N=11), Canada and Stockholm (N=13), Sweden had a difference in their quality of life (QoL). QoL was assessed using Dementia Care Mapping (DCM) tool three times over one year for the reliability of data. DCM is a technique and observational framework devised to systematically investigate QoL from the perspective of the older adults with dementia. The results of the study demonstrated that the residents with dementia living in a homelike and positive stimulating setting showed a higher level of potential positive engagement, and less agitated and withdrawn behaviors compared to those in the large-scale institutional setting. Residents living in a large-scale institutional setting in Canada showed so far as five times more agitated/distressed behaviors and twice more withdrawal compared to the ones living in a small-scale homelike setting in Sweden. The study supports that the large-scale institutional environment was considerably associated with levels of lower quality of life among the residents with dementia.