Objective To examine the determinants of potentially inappropriate medication (PIM) use. Data Sources/Study Setting U.S. nationally representative data on (n = 16,588) noninstitutionalized older adults (age ≥65) with drug use from the 2006–2010 Medical Expenditure Panel Survey. Study Design We operationalized the 2012 Beers Criteria to identify PIM use during the year, and we examined associations with individual‐level characteristics hypothesized to be quality enabling or related to need complexity. Principal Findings Almost one‐third (30.9 percent) of older adults used a PIM. Multivariate results suggest that poor health status and high‐PIM‐risk conditions were associated with increased PIM use, while increasing age and educational attainment were associated with lower PIM use. Contrary to expectations, lack of a usual care source of care or supplemental insurance was associated with lower PIM use. Medication intensity appears to be in the pathway between both quality‐enabling and need‐complexity characteristics and PIM use. Conclusion Our results suggest that physicians attempt to avoid PIM use in the oldest old but have inadequate focus on the high‐PIM‐risk conditions. Educational programs targeted to physician practice regarding high‐PIM‐risk conditions and patient literacy regarding medication use are potential responses.