Although patients with Alzheimer's disease or other types of dementia constitute a significant proportion of all nursing home residents, nursing home care for such patients generally remains inadequate. Care in such nursing facilities has evolved along ''medical'' lines, with the physical environment closely resembling that of the hospital and emphasis placed on providing skilled nursing care for patients with physical illness rather than cognitive impairment. Special care units that incorporate physical design elements, programs, and services specifically tailored to the perceived needs of the Alzheimer's disease patient may constitute a remedy for this situation. The number of such units is growing rapidly; however, current special care units exhibit widely divergent program philosophies, environmental designs, and staffing patterns. Few data are available from systematic evaluations that document the efficacy and cost-effectiveness of any particular program or the special care unit approach in general. Although further study is required to determine the precise characteristics of optimum special care for Alzheimer's disease patients, future approaches should include alternative forms of residential care, programs to increase social and therapeutic activities, and new design principles.