The effects of functional grouping of people with intellectual disabilities on care practices in small residential homes in the community were investigated. A group comparison and a matched-pairs comparison were carried out in settings where less than or more than 75% residents were non-verbal, non-ambulant, had severe challenging behaviour, severe social impairment or were verbal and ambulant. Further analysis, focused on those with challenging behaviour was carried out using ordinal regression. In the group-comparison study, no significant differences were found for three of the five groups. Residents who were non-ambulant were rated as receiving care with less interpersonal warmth in grouped settings; residents with severe challenging behaviour were rated as receiving less good care practices in four respects (interpersonal warmth, assistance from staff, level of speech and staff teamwork) in grouped settings. The matched-pairs comparison found significant differences only for people with challenging behaviour, where grouped settings achieved less good results in terms of interpersonal warmth and staff teamwork. Higher adaptive behaviour and mixed settings were predictive of better care practices on 13 of 14 items of the Active Support Measure (ASM), with some setting variables also predictive for some items. Care practices only appear to vary for people with challenging behaviour, where grouped settings appear to offer less good results in some respects.