In a shift away from institutional long term services and supports (LTSS), the federal government and states have pursued an array of strategies for expanding access to home and community-based services (HCBS) over the past few decades. Yet, little is known about variations in the availability or use of Medicaid HCBS within states, across rural and urban areas. This study used the national Medicaid Analytical Extract claims data file (2008) to examine differences in HCBS use and expenditures among rural and urban older adult Medicaid beneficiaries receiving LTSS. The study found that rural Medicaid LTSS users were less likely to receive HCBS and more likely to receive nursing facility services than their urban counterparts. The proportion of LTSS spending for nursing facility services was significantly greater among rural than urban LTSS users and expenditures for personal care, home health, hospice, adult day care, and rehabilitation were all significantly lower for rural LTSS users compared with those living in urban areas. Multivariate analyses showed that beneficiary characteristics alone do not explain the observed rural-urban differences in HCBS use and expenditures. State policies and other factors such as urban and rural differences in the availability and supply of HCBS and nursing facility services, are likely important contributors to differences in HCBS use and expenditures.