Objectives: The objective of this longitudinal study was to compare the trajectory of subjective quality of life in 2 groups of older adults: those who entered a nursing home and those who remained living in the community with similar clinical conditions. Method: PAQUID is a prospective population-based study. It included, at baseline, 3777 community-dwelling participants aged 65 years and over. Participants were followed-up for up to 27 years. Among people living at home at baseline, 2 groups were compared: participants who entered a nursing home over a 20-year follow-up (n = 528) and those who remained community dwellers (n = 2273). We used latent process mixed models to estimate the relationship between mean trajectory of subjective quality of life and admission into a nursing home. We computed univariate and multivariate models taking into account potential confounders (age, gender, education, income, comorbidities, dementia, disability and depression). Results: Nursing home placement was significantly associated with a drop in quality of life between the last visit before and after institutionalization. Nevertheless, we found no difference in quality of life trajectory after this initial drop. Conclusion: Older adults exhibit an acute drop in quality of life after nursing home admission, probably reflecting the associated psychological distress. Even though their quality of life does not go back to pre-admission levels, the residents do not show a steeper decline when compared to the “natural” evolution of quality of life in older adults living in the community, which suggests a relative adaptation to their new living conditions.