Data regarding the association of sarcopenia with hospitalization has led to inconclusive results in patients undergoing dialysis. The main goal of this research was to investigate the association between sarcopenia and hospitalization in Chinese individuals on continuous ambulatory peritoneal dialysis (CAPD). Eligible patients on CAPD were prospectively included, and followed up for 48 weeks in our PD center. Sarcopenia was identified utilizing the criteria set by the Asian Working Group on Sarcopenia in 2019 (AWGS 2019). Participants were categorized into sarcopenia (non-severe sarcopenia + severe sarcopenia) and non-sarcopenia groups. The primary outcome was all-cause hospitalization during the 48-week follow-up period. Association of sarcopenia with all-cause hospitalization was examined by employing multivariate logistic regression models. The risk of cumulative incidence of hospitalization in the 48-week follow-up was estimated using relative risk (RR and 95% CI). The cumulative hospitalization time and frequency at the end of 48-week follow-up were described as categorical variables, and compared by χ2 test or fisher's exact test as appropriate. Subgroup and sensitivity analyses were also conducted to examine whether the potential association between sarcopenia and hospitalization was modified. A total of 220 patients on CAPD (5 of whom were lost in follow-up) were included. Prevalences of total sarcopenia and severe sarcopenia were 54.1% (119/220) and 28.2% (62/220) according to AWGS 2019, respectively. A total of 113 (51.4%) participants were hospitalized during the 48-week follow-up period, of which, the sarcopenia group was 65.5% (78/119) and the non-sarcopenia group was 34.7% (35/101), with an estimated RR of 1.90 (95%CI 1.43–2.52). The cumulative hospitalization time and frequency between sarcopenia and non-sarcopenia groups were significantly different (both P < 0.001). Participants with sarcopenia (OR = 3.21, 95%CI 1.75–5.87, P < 0.001), non-severe sarcopenia (OR = 2.84, 95%CI 1.39–5.82, P = 0.004), and severe sarcopenia (OR = 3.66, 95%CI 1.68–8.00, P = 0.001) demonstrated a significant association with all-cause hospitalization compared to individuals in non-sarcopenia group in the 48-week follow-up. Moreover, participants in subgroups (male or female; < 60 or ≥ 60 years) diagnosed with sarcopenia, as per AWGS 2019, were at considerably high risk for hospitalization compared to those with non-sarcopenia. In sensitivity analyses, excluding participants lost in the follow-up, the relationships between sarcopenia and hospitalization (sarcopenia vs. non-sarcopenia; severe sarcopenia/non-severe sarcopenia vs. non-sarcopenia) were consistent. This research involving Chinese patients on CAPD demonstrated a significant association between sarcopenia and incident hospitalization, thereby emphasizing the importance of monitoring sarcopenia health in this population.