The study investigated the role of institutional environment in adjustment of older adults living in old age homes of Punjab, Pakistan. The study was conducted on a sample of 270 residents, living in 18 old age facilities across Punjab. The data was collected through a structured interview questionnaire and was analyzed through SPSS (v. 22). The multiple regression analyses suggested that institutional environment along with number of children and number of visitors was a significant predictor of adjustment of older adults. Interventions such as higher support from staff and residents, autonomy, and engagement can help older adults to adjust better in old age homes.