The purpose of this article is to describe how the use of quantitative (quasi-experimental) and qualitative (grounded-theory) methods in an evaluation of new dementia special care units led to a better understanding of how the nursing home environment affects residents with dementia, which in turn helped to advance theory development in person–environment interaction. The environmental intervention involved changes in social density (size of resident group), spatial density (space per person), and privacy. A second aim of the article is to illustrate that applied research cannot be perfectly preplanned; rather, it is a process that involves ongoing decisions and management of unexpected events. We describe the sequence of key methodological decisions made during the planning, implementation, and integration phases of the study, which was conducted over a 21-month period. Results of this study highlight the benefits of mixed-method designs for evaluation research. © 2002 Wiley Periodicals, Inc. Res Nurs Health 25:479–488, 2002.