SummaryThis study's results complement recent studies that support the importance of the relationship of environmental influences on the social adjustment on a sample largely residing in intermediate care and skilled nursing facilities, support the generalizability of the findings to facilities offering higher levels of care.These findings point to the importance of residential care administrators articulating a philosophy through their programming, physical environment, and emotional climate that supports clients' attempts to become part of the larger community. The importance of management practices in determining how involved residents are in the community supports the notion that facility staff and administrators' explicit and implicit expectations play a major role in determining the client's integration in the larger community. The normalizing influence of staff and clients jointly engaging in activities suggests that facility administrators and mental health consultants underscore the importance of staff's day‐to‐day routine activities and interaction in the adjustment of clients. To the degree that staff encourage increased client growth in functioning and provide an environment that gives clear message of the individual's value and uniqueness and offers skills that reinforce the client's development, former state hospital patients are far more likely to be active participants in the communities to which they have returned.