Objective: To describe the changes in rehabilitation therapy services in nursing homes based in the community during a period of rapid escalation of Medicare payments to nursing homes. Setting: All Medicaid-certified nursing homes in Ohio. Subjects: The 52,705 residents newly admitted to nursing homes in 1994 and 1995. Design: Retrospective trend analysis of administrative data. Main Outcome Measures: For newly admitted residents receiving 90 or more minutes of rehabilitation therapy per week, the trends in percentage and in the amount and type of therapy received were determined for eight quarters. Results: Of all newly admitted residents, 50.5% received 90 or more minutes of therapy. When they received such therapy it averaged 412 minutes per week (SD = 259). Those residents who received rehabilitation services increased by 2.2% each quarter ( p < .001), and the amount of therapy they received increased by 6.4 minutes each quarter ( p < .0001). All three types of rehabilitation therapy-physical, occupational, and speech-increased ( p < .015) over the study period. Conclusions: The traditional nursing home is an important site for the provision of rehabilitation therapy services. Rehabilitation specialists should be aware of these trends as they plan for the future of rehabilitation. The effectiveness of this increased provision of therapy service in terms of measurable outcomes needs to be evaluated.