- Very little is known about the effect of malnutrition on short-term changes of body composition, particularly muscle, among older hospitalized patients. We sought to investigate the association of malnutrition as assessed by the Global Leadership Initiative on Malnutrition (GLIM) criteria with changes of thigh muscle mass and muscle strength among older patients during hospitalization. Forty-one patients (age range 66–97 years, 73% female) participated in this prospective longitudinal observational study. Nutritional status was evaluated using the GLIM criteria on admission and at discharge. Functional status and mid-thigh magnetic resonance imaging (MRI) measurements of cross-sectional area (CSA) were conducted on admission and before discharge. In all, 17% were malnourished and 83% had no malnutrition. Mean mid-thigh muscle CSA declined by 7.0 \(cm^{2}\) (−9%) in malnourished patients during hospitalization (p = 0.008) and remained unchanged among non-malnourished patients (−1%, \(\it p\) = 0.390). Mean mid-thigh CSA of subcutaneous and intermuscular fat did not change significantly during hospitalization in both groups. Malnourished subjects lost 10% of handgrip strength (−1.8 kg) and 12% of knee extension strength (−1.5 kg) during hospitalization. However, the magnitude of both changes did not differ between groups. In a stepwise multiple regression analysis, malnutrition and changes in body weight during hospitalization were the major independent risk factors for the reduction of muscle CSA. Malnutrition according to the GLIM criteria was significantly and independently associated with acute muscle wasting in frail older patients during 2-week hospitalization.