Background Hospitalization episodes in older people are considered critical events because they act in a complex interaction among immobilization effects. Aim The purpose of this study was to evaluate the effects of hospitalization on older adults' handgrip strength (HGS) and to identify factors related to its performance on the test. Methods A cohort study was conducted in a hospital in Natal, Brazil, and enrolled all patients aged 60 years and older between January 2014, and April 2015. Cognitive (Leganes Cognitive Test) and functional status (Katz Index, Lawton Scale and Functional limitation Nagi), physical performance (HGS and gait speed) and depressive symptom assessment (GDS-15) were evaluated at admission and discharge time, as well as information about health and functional status prior to hospitalization. Linear Mixed Models were used to create a predictive model for handgrip strength. Results A total of 1168 hospitalized older adults were evaluated. A significant decrease in HGS means was observed between admission and discharge time for men (28.12 +/- 10.35 and 20.22 +/- 14.08 Kgf, p < 0.01) and for women (19.18 +/- 7.87 and 14.88 +/- 9.79 Kgf, p < 0.01). Undergoing surgery and basal values of the Katz Index were associated with worse HGS performance at discharge. Conclusion A significant decline in handgrip strength during the hospitalization period was observed, which was more pronounced in men. Performing surgery during hospitalization was an important factor for HGS decline in men and women. This study reinforces the importance of early mobilization and muscle strength loss prevention protocols in hospitalized older patients.