(1) Background: Both sarcopenia and disease-related malnutrition (DRM) are unfortunately underdiagnosed and undertreated in our Western hospitals, which could lead to worse clinical outcomes. Our objectives included to determine the impact of low muscle mass (MM) and strength, and also DRM and sarcopenia, on clinical outcomes (length of stay, death, readmissions at three months, and quality of life). (2) Methodology: Prospective cohort study in medical inpatients. On admission, MM and hand grip strength (HGS) were assessed. The Global Leadership Initiative on Malnutrition (GLIM) criteria were used to diagnose DRM and EWGSOP2 for sarcopenia. Assessment was repeated after one week and at discharge. Quality of life (EuroQoL-5D), length of stay (LoS), readmissions and mortality are reported. (3) Results: Two hundred medical inpatients, median 76.0 years-old and 68% with high comorbidity. 27.5% met GLIM criteria and 33% sarcopenia on admission, increasing to 38.1% and 52.3% on discharge. Both DRM and sarcopenia were associated with worse QoL. 6.5% died and 32% readmission in 3 months. The odds ratio (OR) of mortality for DRM was 4.36 and for sarcopenia 8.16. Readmissions were significantly associated with sarcopenia (OR = 2.25) but not with DRM. A higher HGS, but not MM, was related to better QoL, less readmissions (OR = 0.947) and lower mortality (OR = 0.848) after adjusting for age, sex, and comorbidity. (4) Conclusions: In medical inpatients, mostly polymorbid, both DRM but specially sarcopenia are associated with poorer quality of life, more readmissions, and higher mortality. Low HGS proved to be a stronger predictor of worse outcomes than MM.

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