Our objective was to identify the optimal method to assess reduced muscle mass (RMM) using the Global Leadership Initiative on Malnutrition (GLIM) approach and investigate the roles of the GLIM approach in nutrition assessment and survival prediction in colorectal cancer (CRC) patients. During a median follow-up period of 4.2 (4.0, 4.4) years, a development cohort of 3612 CRC patients with a mean age of 64.09 ± 12.45 years was observed, as well as an external validation cohort of 875 CRC patients. Kaplan–Meier curves and multivariate Cox regression were adopted to analyze the association between GLIM-diagnosed malnutrition and the overall survival (OS) of CRC patients. A nomogram predicting individualized survival was constructed based on independent prognostic predictors. The concordance index, calibration curve, and decision curve were applied to appraise the discrimination, accuracy, and clinical efficacy of the nomogram, respectively. Patients diagnosed with severe malnutrition based on either the mid-arm muscle circumference (MAMC) or body weight-standardized hand grip strength (HGS/W) method had the highest mortality hazard ratio (HR, 1.51; 95% CI, 1.34–1.70; p < 0.001). GLIM-defined malnutrition was diagnosed in 47.6% of patients. Severe malnutrition was an independent mortality risk factor for OS (HR, 1.25; 95% CI, 1.10–1.42; p < 0.001). The GLIM nomogram showed good performance in predicting the survival of CRC patients and was clinically beneficial. Our findings support the effectiveness of GLIM in diagnosing malnutrition and predicting OS in CRC patients.