OBJECTIVES: To determine whether slow gait speed increases the risk of costly long-term nursing home residence when accounting for death as a competing risk remains unknown. DESIGN: Longitudinal cohort study using proportional hazards models to predict long-term nursing home residence and subdistribution models with death as a competing risk. SETTING: Community-based prospective cohort study. PARTICIPANTS: Older women (mean age 76.3) participating in the Study of Osteoporotic Fractures who were also enrolled in Medicare fee-for-service plans (N = 3,755). MEASUREMENTS: Gait speed was measured on a straight 6-m course and averaged over two trials. Long-term nursing home residence was defined using a validated algorithm based on Medicare Part B claims for nursing home-related care. RESULTS: Participants were followed until long-term nursing home residence, disenrollment from Medicare plan, death, or December 31, 2010. Over the follow-up period (median 11 years), 881 participants (23%) experienced long-term nursing home residence, and 1,013 (27%) died before experiencing this outcome. Slow walkers (55% of participants with gait speed <1 m/s) were significantly more likely than fast walkers to reside in a nursing home long-term (adjusted hazards ratio (aHR) = 1.79, 95% confidence interval (CI) = 1.54-2.09). Associations were attenuated in subdistribution models (aHR = 1.52, 95% CI = 1.30-1.77) but remained statistically significant. CONCLUSION: Older community-dwelling women with slow gait speed are more likely to experience long-term nursing home residence, as well as mortality without long-term residence. Ignoring the competing mortality risk may overestimate long-term care needs and costs.