This study examined the moderating effect of caregiver burden on the relationship between patients' health status and institutional costs in Alzheimer disease (AD). Data were obtained on whether 421 community-dwelling patients with AD in the CATIE-AD trial received institutional services in the month preceding baseline and at 3-month, 6-month, and 9-month follow-up. All participants had a caregiver who lived with or visited them regularly. Outcome variables include hospital, nursing home, residential, and combined institutional costs. Mixed models were employed to estimate the interaction of Health Utility Index (HUI)-III scores (a health status measure) and 5 measures of caregiver burden. Wherever significant, results indicate that greater caregiver burden weakens the inverse relationship between health utilities and institutional costs, leading to greater costs than would be expected at a given level of health. Altogether 45.0% of the models (9/20) showed this effect (positive coefficient on the burden-HUI interaction term). Interventions to support caregivers should be based on caregiver burden, regardless of care recipient health status, for even seemingly manageable patients may be at heightened risk for institutionalization if caregivers experience sufficiently high levels of burden.