Prescribing potentially inappropriate medications (PIMs), including antipsychotics and benzodiazepines, has been used as an indicator of the quality use of medicines in residential aged care facilities (RACFs). PIMs are associated with an increased risk of falls and hospitalisations in the elderly. The purpose of this study is to assess the extent of prescribing of PIMs in RACFs at baseline in the Pharmacists in residential aged care facilities (PiRACF) study and examine the association of resident and system factors with the number of PIMs. A cross-sectional analysis of 1368 participants from 15 Australian RACFs was performed to detect PIMs using the American Geriatrics Society 2019 Beers® criteria. Most residents (68.1%) were taking at least one regular PIM; 16.9% were taking regular antipsychotics and 11.1% were taking regular benzodiazepines. Long-term proton pump inhibitors were the most frequent class of PIMs. History of falls and higher Charlson Comorbidity Index were associated with an increased number of prescribed PIMs, while dementia diagnosis and older age (85 years or more) were associated with decreased number of PIMs (p-value <0.05). Residents in facilities with lower nurse-to-resident ratios were more likely to have an increased number of PIMs (p value = 0.001). This study indicates that potentially inappropriate prescribing is common in RACFs and interventions to target residents at highest risk are needed.