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The physical environment can influence older people’s health and well-being, and is often mentioned as being an important factor for person-centred care. Due to high levels of frail health, many older people spend a majority of their time within care facilities and depend on the physical environment for support in their daily life. However, the quality of the physical environment is rarely evaluated, and knowledge is sparse in terms of how well the environment meets the needs of older people. This is partly due to the lack of valid and reliable instruments that could provide important information on environmental quality. Aim: The aim of this thesis was to study the quality of the physical environment in Swedish care facilities for older people, and how it relates to residents’ activities and well-being. Methods: The thesis comprises four papers where both qualitative and quantitative methods were used. Study I involved the translation and adaptation of the Sheffield Care Environment Assessment Matrix (SCEAM) into a Swedish version (S-SCEAM). Several methods were used including forward and backward translation, test of validity via expert consultation and reliability tests. In Study II, S-SCEAM was used to assess the quality of the environment, and descriptive data were collected from 20 purposively sampled residential care facilities (RCFs). Study III was a comparative case study conducted at two RCFs using observations, interviews and S-SCEAM to examine how the physical environment relates to older people’s activities and interactions. In study IV, multilevel modeling was used to determine the association between the quality of the physical environment and the psychological and social well-being of older people living in RCFs. The data in the thesis were analysed using qualitative content analysis, and descriptive, bivariate and multilevel statistics. Results: A specific result was the production of the Swedish version of SCEAM. The instrument contains 210 items structured into eight domains reflecting the needs of older people. When using S-SCEAM, the results showed a substantial variation in the quality of the physical environment between and within RCFs. In general, private apartments and dining areas had high quality, whereas overall building layout and outdoor areas had lower quality. Also, older people’s safety was supported in the majority of facilities, whereas cognitive support and privacy had lower quality. Further, the results showed that environmental quality in terms of cognitive support was associated with residents’ social well-being. Specific environmental features, such as building design and space size, were also noted, through observation, as influencing residents’ activities, and several barriers were found that seemed to restrict residents’ full use of the environment. Conclusions: This thesis contributes to the growing evidence-based design field. The S-SCEAM can be used in future research on the association between the environment and people’s health and well-being. The instrument could also serve as a guide in the planning and design process of new RCFs.