Recent European Commission (2008) report on “Long-term care in the European Union” announced that demands for quality and quantity of long-term care services bound to rise. As current models for healthy ageing define institutional care as the last resort, assisted living settings fill a big gap between home and institutions. Varying in scale and design, the overall concept of assisted living facilities is to provide home-like physical environment and social support for those who require help in performing their activities of daily living. The aim of this research is to study the link between environmental qualities of assisted living facilities and well being of cognitively intact elderly. Multiple case study methodology will be followed by selecting facilities varying in size and plan layout configurations. The size of facility, plan layout configuration, walking distances between resident’s room and common areas, accessibility and presence of neighborhood amenities will be the independent variables of this study. Well-being outcomes (dependent variables) will be collected by structured observation of resident’s use of common spaces and their social interactions. Personal digital assistants that run geographical information software will be used to record location and behaviors of residents in social areas. Residents will be asked about their perceptions of facility and neighborhood in an interview. Caregivers will be asked to provide non-medical information and make behavioral assessments about each resident. Research findings will be transformed into design guidelines and an assessment tool for assisted living settings. Currently, no tool exists that links well-being of elderly and physical environment of assisted living, with the potential of affecting policy. Results will be communicated to network of decision-makers, architects, planners, caregivers, and residents of these facilities within European Union.