Marginalized populations have been disproportionately affected by the COVID-19 pandemic. Critically ill patients belonging to racial and ethnic minority populations treated in hospitals operating under crisis or near-crisis conditions may have experienced worse outcomes than White individuals. To examine whether hospital strain was associated with worse outcomes for older patients hospitalized with sepsis and whether these increases in poor outcomes were greater for members of racial and ethnic minority groups compared with White individuals. In this cross-sectional study, multivariable regression analysis was conducted to assess differential changes in all-cause 30-day mortality and major morbidity among older racial and ethnic minoritized individuals hospitalized with sepsis compared with White individuals and changes in hospital strain using Medicare claims data. Data were obtained on patients hospitalized between January 1, 2016, and December 31, 2021, and analyzed between December 16, 2023, and July 11, 2024. Time-varying weekly hospital percentage of inpatients with COVID-19. Composite of all-cause 30-day mortality and major morbidity. Among the 5 899 869 hospitalizations for sepsis (51.5% women; mean [SD] age, 78.2 [8.8] years), there were 177 864 (3.0%) Asian, 664 648 (11.3%) Black, 522 964 (8.9%) Hispanic, and 4 534 393 (76.9%) White individuals. During weeks when the hospital COVID-19 burden was greater than 40%, the risk of death or major morbidity increased nearly 2-fold (adjusted odds ratio [AOR], 1.90; 95% CI, 1.80-2.00; P < .001) for White individuals compared with before the pandemic. Asian, Black, and Hispanic individuals experienced 44% (AOR, 1.44; 95% CI, 1.28-1.61; P < .001), 21% (AOR, 1.21; 95% CI, 1.11-1.33; P < .001), and 45% (AOR, 1.45; 95% CI, 1.32-1.59; P < .001) higher risk of death or morbidity, respectively, compared with White individuals when the hospital weekly COVID-19 burden was greater than 40%. In this cross-sectional study, older adults hospitalized with sepsis were more likely to die or experience major morbidity as the hospital COVID-19 burden increased. These increases in adverse outcomes were greater in magnitude among members of minority populations than for White individuals.