Malnutrition is prevalent among hospitalized older patients. Early identification is therefore essential to implementing appropriate therapeutic interventions. This study aimed to explore the correlation between handgrip strength (HGS) and nutritional status in hospitalized older adults. This observational cross-sectional study was conducted at King Abdulaziz University Hospital, where a consecutive cohort of older adult inpatients was enrolled for participation. Shortly after admission, HGS and nutritional status were assessed using a dynamometer and the most recent version of the Mini-Nutritional Assessment Short Form (MNA-SF) test, respectively. Key anthropometric and biochemical indicators were also collected. A total of 135 consecutive patients were evaluated. Among participants with low HGS, 18 (16.22%) were malnourished, 43 (38.74%) were at risk of malnutrition, and 50 (45.05%) had normal nutrition status. The participants with low HGS had low hemoglobin, low lymphocyte levels, high creatinine levels, high BUN levels, high CRP levels, high HbA1c levels, and high vitamin B12 levels. Multiple logistic regression analysis showed that age, hemoglobin, and HbA1C were independently associated with low HGS. Based on the cut-off values for the HGS by the European Working Group on Sarcopenia in Older People-2 (EWGSOP2), low HGS showed high sensitivity to detect "malnourished and at risk of malnutrition" as well as "malnourished alone;" however, the specificity was low to exclude "malnourished and at risk of malnutrition" as well as "malnutrition alone." Age over 75 years, low hemoglobin, and elevated HbA1C levels were independent risk factors for low HGS. While HGS was sensitive in detecting malnutrition or risk, its specificity was low. Therefore, HGS may not be adequate as a standalone tool to assess nutritional status in hospitalized older adults. Replication of this study using locally reliable and validated HGS cut-off values is warranted to confirm these findings.