Since the late 1980s, policymakers have attempted to reduce the institutional bias of their long-term services and supports by investing in more accessible home and community-based services for older adults with long-term care needs and adults with disabilities. To further advance rebalancing discussions, this study examined the resident, facility, and state characteristics associated with the admission of community-dwelling older adults to the nursing home and the subsequent discharge of this population back to community settings. Data from the Minimum Data Set (MDS) 2.0 were used to construct episodes of care for all newly-admitted residents aged 65 and older to any free-standing U.S. nursing home. Several secondary datasets including the Online Survey, Certification, and Reporting Database (OSCAR), LTCFocus.org website, Nursing Home Compare, Nursing Home Data Compendium, and U.S. census estimates were used in the study analyses. On average, approximately 5.3% of all newly admitted nursing home residents were admitted directly from home with substantial variations across states. Most residents admitted directly from home had limited to extensive dependency in activities of daily living and moderate cognitive impairment. The most common diagnoses on admission included dementia and diabetes. While 31% of residents admitted from home remained in the facility at least 365 days after admission, 32% were discharged to the community, 15% were discharged to the hospital, and 21% died. Most residents admitted from assisted living communities, either remained in the facility or died by the end of the study. Findings from multivariate analyses suggest that resident-level factors, including demographics and health status, influenced the community transition of nursing home residents. Facility characteristics, including ownership, deficiency scores, the ratio of Medicare and Medicaid residents, and urban location were associated with discharge to the community but the effect of these factors differed according to length of stay. The commitment of a state to home and community-based services was also predictive of community discharge. Collectively, findings suggest that resident, facility, and state characteristics influence the community discharge of residents admitted from home or assisted living communities. By understanding the reasons for admission to the nursing home and the factors influencing discharge from the facility, policymakers and administrators can better anticipate and care for community-dwelling older adults with long-term care needs.