Purpose: The purpose of this study was to identify factors affecting agitation in patients with dementia who live in nursing homes. Factors including background and proximal factors based on the Algase’s Need-Driven Dementia- Compromised Behavior model were tested. Methods: Data collection was performed from Dec. 1 to 28 2015, and 193 elders from 4 nursing homes participated in this study. The instruments included CMAI (Cohen-Mansfield Agitation Inventory), K-MMSE (Korean Mini-Mental State Examination), Holden Communication Scale, K-ADL (Korea Activity of Daily Living scale), DS-DAT (Discomfort scale-Dementia of the Alzheimer’s Type), CSDD (The Cornell Scale for Depression in Dementia), NPI (Neuropsychiatric Inventory), as well as items on the physical and psychosocial environment. Data analysis was performed using descriptive statistics, t-test, ANOVA, Scheffé and Dunnet T3, Pearson correlation and multiple regression. Results: Multiple regression analyses identified hallucination (β=.24), delusion (β=.22), pain (β=.15), and the total period of being diagnosed with dementia (β=.10) as significant predictors of agitation and these factors explained 36.0% of the variance in the model. Conclusion: The findings of this study show that hallucination delusion, pain and total period of being diagnosed with dementia need to be considered when developing intervention programs to control agitation in patients with dementia.