Objectives: Understanding the nutritional journey that older adults make from rehabilitation to home will help to target nutrition screening and intervention programs. This study aimed to determine the nutritional status, physical function and health-related quality of life amongst malnourished older adults admitted to two rural rehabilitation units and 12 weeks post-discharge to the community. Design: Observational prospective cohort study, conducted August 2013 to February 2014. Setting: Rehabilitation units in rural New South Wales, Australia. Participants: Thirty community-dwelling, malnourished older adult inpatients (mean age 79.5±7.1 years, 57% female). Intervention: Observation of usual care: basic nutrition services typical to rural rehabilitation units. Measurements: Outcome assessments were measured at rehabilitation admission, discharge and 12 weeks post-discharge, with nutrition status via the Scored Patient-Generated Subjective Global Assessment as the primary outcome measure. Secondary outcome measures included physical function (Modified Barthel Index) and health-related quality of life (Assessment of Quality of Life-6D). Results: At admission, half of the rehabilitation patients were moderately malnourished and half were severely malnourished, with the cohort becoming and remaining moderately malnourished on discharge and 12 weeks post-discharge. Only four patients (24%) were well-nourished 12 weeks post-discharge. Following discharge, there was a trend showing decline in physical function. No improvement was found in health-related quality of life following discharge. Conclusion: Malnourished older adults admitted to rural rehabilitation units with basic nutrition care are likely to be discharged with moderate malnutrition, and remain moderately malnourished in the community for at least 12 weeks. Physical function and health-related quality of life remain poor in this population. Collaboration between health services and within the multidisciplinary team is essential to identify and treat malnourished older adults, and novel approaches for inpatient and post-discharge nutrition support is needed.