The social environments of people with dementia are complex and still not fully understood. Investigating how residents in a dementia care setting navigate and participate within social groups is critical as the therapeutic benefits of social engagement are unequivocal. An ethnographic study of social environments within a dementia care residence revealed that there is active socialization and even strong and lasting friendships formed between people with dementia. Many of these relationships were observed to be a part of groups, ‘nested’ within the larger social environment. These ‘nested social groups’ had unique dynamics and their structuring was often influenced by outside factors (e.g. physical environment and staff preferences). The existence of these groups has implications for the experiences and quality of life of the residents in long-term care. Nested social groups will be defined and their function within the social environment will be discussed.