Various studies on living arrangements have generally presumed that there is a convergence between preferred place of stay and the actual one in any society. However, very little information is available on the preferences in living arrangements among the elderly, especially in the Indian context. Hence this study focuses afresh on the different aspects of preference in living arrangements among the elderly in Orissa. A sample size of 300 elderly persons, with 150 from the rural and 150 from the urban Orissa, was drawn for this study. The information was collected through a household survey. The major objective of this paper is to study the pattern of living arrangement preferences of the elderly in Orissa. In order to understand the deviation from the preferred place of stay among the elderly, an attempt has also been made to look into the pattern in preference versus actual living arrangements. In general, the demographic differentials in living arrangement preferences indicate that irrespective of the demographic characteristics, a majority of the elderly in Orissa prefer to be in co-residence. Data on those living alone show a higher proportion of younger-olds, females, and the elderly with no sons preferring to live alone as compared to their counterparts. Bivariate analysis shows that demographic characteristics like age, sex and number of surviving sons affect significantly the living arrangement preferences among the elderly in Orissa. Similarly, education of the elderly and their economic independence are also strongly correlated with the preference to live alone. This study brings out some important findings, which would be helpful for planners and policy makers in preparing a suitable policy for the elderly population.