The aim of this study was to test a causal model of the predictors of agitation among 405 nursing home residents in Taiwan with varying degrees of cognitive impairment. Chart review and behavioral observations were used to assess residents' physical and psychosocial condition. The final version of the model had a good fit. Cognitive function and depression had direct effects on agitation, and pain and functional ability had indirect effects on agitation via depression. Additionally, cognitive function and pain influenced functional ability directly, which in turn influenced depression and ultimately influenced agitation. The results suggest that effective management of agitation in demented residents requires identifying the needs underlying the behavior rather than directly treating the behavior itself. © 2014 Wiley Periodicals, Inc.