Background: Nursing home care for people with dementia is increasingly organized in small-scale care settings. This study focuses on the question of how small-scale care is related to the overall activity involvement of residents with dementia, and their involvement in different types of activities. As several studies have indicated, activity involvement is important for the quality of life of residents. Methods: Data were derived from the first measurement cycle (2008/2009) of the Living Arrangements for people with Dementia study, in which 136 care facilities and 1,327 residents participated. The relationship between two indicators of small-scale dementia care (group living home care characteristics, and the total number of residents with dementia in the facility) and activity involvement (Activity Pursuit Patterns of the Resident Assessment Instrument Minimum Data Set) were studied with multilevel multiple regression analyses. All analyses were adjusted for the residents' age, sex, neuropsychiatric symptoms, and dependency on the activities of daily living. Results: Residents of care facilities with more group living home care characteristics were more involved in overall and preferred activities. Furthermore, they were involved in more diverse activities. Overall, no relationship was found between the number of residents at the facility and activity involvement. Conclusions: These results indicate that small-scale dementia care has a positive effect on activity involvement of residents. The current study also sheds light on the lack of activity involvement of many residents with dementia, especially those who are older, male, and with higher dependency. © International Psychogeriatric Association 2012.