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Background dementia may increase care home residents' risk of COVID-19, but there is a lack of evidence on this effect and on interactions with individual and care home-level factors. Methods we created a national cross-sectional retrospective cohort of care home residents in Wales for 1 September to 31 December 2020. Risk factors were analysed using multi-level logistic regression to model the likelihood of SARS-CoV-2 infection and mortality. Results the cohort included 9,571 individuals in 673 homes. Dementia was diagnosed in 5,647 individuals (59%); 1,488 (15.5%) individuals tested positive for SARS-CoV-2. We estimated the effects of age, dementia, frailty, care home size, proportion of residents with dementia, nursing and dementia services, communal space and region. The final model included the proportion of residents with dementia (OR for positive test 4.54 (95% CIs 1.55–13.27) where 75% of residents had dementia compared to no residents with dementia) and frailty (OR 1.29 (95% CIs 1.05–1.59) for severe frailty compared with no frailty). Analysis suggested 76% of the variation was due to setting rather than individual factors. Additional analysis suggested severe frailty and proportion of residents with dementia was associated with all-cause mortality, as was dementia diagnosis. Mortality analyses were challenging to interpret. Discussion whilst individual frailty increased the risk of COVID-19 infection, dementia was a risk factor at care home but not individual level. These findings suggest whole-setting interventions, particularly in homes with high proportions of residents with dementia and including those with low/no individual risk factors may reduce the impact of COVID-19. [ABSTRACT FROM AUTHOR]