Institutionalization is a potential cost burden for long-term care (LTC) systems in many developed countries. Japan implemented an LTC insurance system in April 2000 and control of institutionalization has been one of its major issues. This study used over 2.1 million national representative administrative records to determine the factors that contribute to care use and the availability of local LTC facilities associated with the use of institutional LTC in Japan. Factors associated with the 1-year institutional use of individuals were examined by a multivariate logistic regression analysis. In addition, we determined the impact of the regional capacities of LTC and medical institutions and the regional deviations of institutional LTC use using standardized use rates estimated from the demography and disability levels of regional LTC users. We found that subjects aged 85 years or older had more than twice as high a risk as those aged less than 74 years and that the risk of use increased more than eight times at the highest disability level. In addition, the regional capacity of LTC institutions promoted the use of those institutions, whereas that of general beds had a suppressive effect on such use, possibly due to social hospitalization. Our results suggest that the use of LTC institutions is accelerated by the age and disability level of users as well as the regional availability of such institutions and that an appropriate supply of LTC institutions could increase their use and potentially improve the efficiency of medical care.