&NA;This article explores advances over the past decade in understanding the role of the physical environment in supporting individuals with dementia. On a global scale, there is growing evidence that smaller and more homelike units are associated with more positive outcomes and that noise and distractions lead to less positive resident outcomes. At a more discrete level of the setting, there is also evidence that certain individual features (personalized orientation cues, direct visibility of the toilet, and increased lighting) have a positive impact of specific outcomes such as orientation, continence, and eating. However, much of existing environmental research is plagued by significant methodologic limitations that need to be overcome for the field to make significant advances in the future.