The purpose of this study was to test the effect of nurse-managed transitional care on the quality of care and functional ability of individuals following discharge from subacute units. Registered nurses employed on subacute units in a skilled nursing facility provided the nurse-managed transitional care. Using a quasi-experimental design, data were collected on admission to the subacute unit, at the time of discharge, 1 week following discharge, and 3 months following discharge on 242 treatment and comparison participants. The treatment group participants' overall function and quality of the care environment were significantly higher than the comparison group at 1 week and 3 months following discharge. Participants did not differ significantly on basic activities of daily living or number of readmissions.