Objectives.Is discharge destination a determinant of readmission? Studies to date have been inconclusive. The primary purpose of this study was to identify the role of discharge destination in the occurrence of repeat hospitalizations for a national sample of patients discharged from Veterans Health Administration (VHA) hospitals.Methods.The authors studied a 20% random sample of individual patients, 65 years of age or older, with either chronic obstructive pulmonary disease, stroke, or dementia who were discharged from a Veterans Health Administration hospital in 1988. All data for the study were obtained from secondary administrative sources. Multiple sources were used to determine discharge destination. The authors focused on personal home versus nursing home discharge destination. Both VHA and Medicare discharge data were used to track hospital readmissions. Proportional hazards regression models were used to examine the independent association of discharge destination with time to readmission within 30 days, 6 months, 1 year, and 2 years of discharge, adjusting for severity, other clinical and demographic characteristics, and censoring deaths.Results.After adjustment and including out-of-system (Medicare) use, we found that patients with chronic obstructive pulmonary disease and patients with dementia who were discharged to nursing homes (community and Veterans Health Administration, respectively) were less likely to be readmitted within 30 days after discharge than patients discharged to personal homes.Conclusions.These findings have important implications for adjusting hospital performance profiles based on discharge destination and for focussing efforts to reduce the frequency and associated costs of hospital readmissions.