Objective: To evaluate the benefits of coordinating community services through the Post‐Acute Care (PAC) program in older patients after discharge from hospital. Design: Prospective multicentre, randomised controlled trial with six months of follow‐up with blinded outcome measurement. Setting: Four university‐affiliated metropolitan general hospitals in Victoria. Participants: All patients aged 65 years and over who were discharged between August 1998 and October 1999 and required community services after discharge. Interventions: Participants were randomly allocated to receive services of a Post‐Acute Care (PAC) coordinator (intervention) versus usual discharge planning (control). Main outcome measures: Comparison of quality of life and carer stress at one‐month post‐discharge, mortality, hospital readmissions, use of community services and community and hospital costs over the six months post‐discharge. Results: 654 patients were randomised, and 598 were included in the analysis (311 in the PAC group and 287 in the control group). There was no difference in mortality between the groups (both 6%), but significantly greater overall quality‐of‐life scores at one‐month follow‐up in the PAC group. There was no difference in unplanned readmissions, but PAC patients used significantly fewer hospital bed‐days in the six months after discharge (mean, 3.0 days; 95% CI, 2.1–3.9) than control patients (5.2 days; 95% CI, 3.8–6.7). Total costs (including hospitalisation, community services and the intervention) were lower in the PAC than the control group (mean difference, $1545; 95% CI, $11–$3078). Conclusions: The PAC program is beneficial in the transition from hospital to the community in older patients.