Nursing homes are increasingly using nurse practitioners (NPs) and physician assistants (PAs), with approximately 37.1% of them employing NPs/PAs in 2010. This study examines the role of market factors in the nursing homes’ decision to employNPs/PAs. The data (2000-2010) was derived from LTCFocus. The binary dependent variable represented nursing homes’ decision to employ NPs/PAsand the market characteristics constituted the independent variables. A panel logistic regression with facility random effects and state and year fixed effects was used for analysis. Results show that nursing homes operating in more competitive markets and those with higher Medicare managed care penetration are more likely to have NPs/PAs. Moreover, larger, multi-facility, and for-profit facilities and those with higher occupancy rate are more likely to have NPs/PAs. In contrast, nursing homes in counties with higher proportion of residents whose primary support is Medicaid and greater number of hospital-based facilities are less likely to have them. Nursing homes with greater resources employ NPs/PAsas a differentiation strategy in more competitive markets. Policymakers should explore strategies to incentivize use of NPs/PAs in resource-constrained nursing homes, as a potential mechanism to reduce disparities in care.