Use of Potentially Inappropriate Psychoactive Medications (PIPM) poses a serious threat of falls among elderly nursing home residents. With this objective, the study was conducted to identify the effects of PIPMs on falls among nursing home residents. The 2004 National Nursing Home Survey (NNHS) was used as the data source. Logistic regression was performed to ascertain the relationship between residents' falls in the past 180 days and use of PIPM as per Beers' criteria in the presence of other risk factors. The data analysis was performed using SAS 9.1. The 2004 NNHS includes 1174 facilities consisting of 3868 males and 9639 females. The mean age of the residents was 80.5±12.97 years. The residents who fell were older than the residents who did not fall (82.46 vs. 79.5 years, p<0.0001). Residents on PIPMs were at an increased risk of falling compared to those who did not take PIPMs (odds=1.295, p<0.0001). Residents suffering from mental disorders fell more compared to the other group (odds=1.316, p<0.0001). Residents' fall-risk increased with an increase in the number of impaired ADLs (odds=1.158, p<0.0001). The fall-risk also increased with advance of age (odds=1.017, p<0.0001). Use of bedrails had a protective effect on residents fall-risk (odds=0.652, p<0.0001). In addition to these factors, male gender (odds=1.247, p<0.0001) and white race (odds=1.485, p<0.0001) were also significant risk factors. Among facility factors, being a non-profit facility (n=467) was associated with a higher risk of falls (odds=1.133, p<0.0001). Prevention of falls in elderly nursing home residents remains a challenge. PIPMs are still prescribed to the elderly nursing home residents. Access to appropriate psychoactive medications should be ensured. Residents with the identified risk factors should be closely monitored. Further research should be pursued to evaluate the impact of medications in other therapeutic categories and facility factors on falls.