OBJECTIVES:  Antipsychotic use among dual eligible nursing home residents is a cost and safety concern. This study examined the comparative risk of death in dual eligible elderly nursing home residents using typical and atypical agents. METHODS: A retrospective cohort design matched on propensity score was used to examine the risk of death due to antipsychotic use among dual eligible nursing home residents 65 years or older from four states. New typical and atypical users in nursing homes were followed for up to six month after the exposure without censoring. The risk of death was modeled using Cox proportional model and extended Cox hazard model stratified on matched pairs based on propensity score. RESULTS: The unadjusted mortality rate was 19.22% for atypical antipsychotic users and 24.27 % for typical antipsychotic users. Cox proportional hazard model revealed significant increased risk of death [Hazard Ratio (HR) 1.35, 95%; Confidence Interval (CI) 1.30- 1.63] among typical users when compared to atypical users. The extended Cox model, used due to the violation of proportional hazards assumption, revealed that risk of death is twice greater among typical antipsychotic users during the initial 40 days after the start of antipsychotic treatment [HR 2.06, 95%; CI 1.82-2.32] when compared to atypical users. However, no significant differences were found after 40 days of antipsychotic exposure. CONCLUSIONS: The use of typical antipsychotic agents was associated with increased risk of death among aged dual eligible beneficiaries when compared to atypical use, especially within 40 days of treatment, possibly due to their underlying health status.