Physical restraints are commonly used on older persons living in geriatric care settings. The aim of this study was to investigate the influence of environmental and organizational variations and resident and staff characteristics on restraint prevalence. In this cross-sectional study of 33 nursing home wards and 12 group living units for old persons with dementia in two municipalities in northern Sweden, 540 residents (mean age 82) and 529 staff members were evaluated for resident and staff characteristics and organizational and environmental variables. The proportion of residents with impaired mobility function, the number of behavioral disturbances, and nursing staff's attitudes towards use of restraints were the strongest discriminators between restraint-free wards and wards that used restraints. A classification function analysis showed that these three variables could correctly classify the wards as restraint-free, low-use, and high-use wards in 63.6% of the cases, with the highest figures for restraint-free wards (91%). This study has shown that the use of physical restraints is strongly connected with residents' functional status and nursing staffs' attitudes toward their use.