The objective of the study was to assess the psychosocial wellbeing of institutionalized elders in comparison with noninstitutionalized elders of Bahir Dar City Administration. A comparative mixed study involving 82 institutionalized elders under the support of Public Sphere Charity and Development Organization and 94 non institutionalized elders under the support of Fana Children and Community Development Association were designed. Seventy eight institutional and 90 non institutional elders aged 60+ completed psychosocial wellbeing scale and a general survey questionnaires on demographic characteristics. And 4 institutional and 4 noninstitutionalized elder aged 60+ participated in an interview. Descriptive, statistical and thematic analyses were conducted to achieve the objectives. The findings of quantitative data showed that using mean value of the psychosocial wellbeing scale, noninstitutionalized elders had high level of psychosocial wellbeing relatively compared to the institutionalized elders. Statistical significant difference was found in current place of living .However there was no Statistical significant gender difference in the psychosocial wellbeing of institutionalized and noninstitutionalized elders. Findings of qualitative data revealed that there were differences in social relationship, opportunity to participate indifferent activity, exposing to sharp sound and poisoned air. However there were similarity in suffering to gate social services, poor housing condition and bad infrastructure. In addition both of them were similar in sense of useless, hopeless, meaningless, and their coping mechanisms. These finding suggest that the government should revise its social welfare police regarding to elders who enable elders easily access to health service, housing, transportation etc.Noninstitutionalized elders had better psychosocial wellbeing than institutionalized elders.