Dementia presents a growing societal challenge, particularly among older adults, increasing the demand for long-term services and supports (LTSS) in home and community settings. However, limited research has examined the socio-demographic, medical, and environmental factors influencing LTSS utilization among community-dwelling older persons with dementia (PWD). The potential ways that the in-home environment affects the relationship between the need for care and LTSS use is an understudied area Guided by Andersen’s Behavioral Model of Health Services Use and the Ecological Model of Aging, this study examines how need factors relate to LTSS utilization and whether in-home environment quality moderates this relationship. Aim 1 explores the association between need factors and three indicators of LTSS use among older PWD: total care network size, type of care, and weekly hours of care. Aim 2 assesses whether the relationship between need factors and LTSS use is moderated by the in-home environment, including accessibility and interior conditions. Using data from the 2018 National Health and Trends Aging Study (NHATS), this study examines a nationally representative sample of Medicare beneficiaries aged 65 and older living in the community (n = 5,547), with a final analytic sample of respondents with complete data (n = 405). Findings indicate that community-dwelling older PWD who have greater ADL limitations are more likely to 1) have a larger care network (RR = 1.715, SE = 0.039, p < 0.001), 2) rely on family/friend care (OR = 3.235, SE = 0.119, p < 0.001), and 3) receive more weekly care hours (RR = 2.467, SE = 0.148, p < 0.001) compared to those with fewer ADL limitations. Furthermore, optimal interior housing conditions strengthened the association between ADL limitations and LTSS use, as reflected in both the total care network size (RR = 1.116, SE = 0.045, p < 0.01) and family/friend care received (OR = 1.339, SE = 0.133, p < 0.05). These findings highlight the critical role of both ADL needs and home environment quality in shaping LTSS utilization. Tailoring LTSS to account for both functional limitations and living conditions may enhance care strategies for older PWD.