<b><i>Introduction:</i></b> Sarcopenia is associated with poor health outcomes and highly prevalent in individuals with age-related diseases. This study aimed to determine whether sarcopenia as a comorbid disease is associated with the incidence of institutionalisation and mortality in geriatric rehabilitation inpatients. <b><i>Methods:</i></b> REStORing health of acutely unwell adulTs (RESORT) includes geriatric rehabilitation patients assessed for sarcopenia (the European Working Group on Sarcopenia in Older People [EWGSOP, 2010], EWGSOP2 [2018], and the Asian Working Group for Sarcopenia [AWGS 2019]), multimorbidity, disease severity, and specific diseases (Charlson Comorbidity Index and Cumulative Illness Rating Scale) at admission. The incidence of institutionalisation and mortality was recorded 3 months after discharge. Logistic regressions were adjusted for age and sex with “low morbidity and no sarcopenia” as the reference group. <b><i>Results:</i></b> In 549 included patients (median age was 82.2 [77.4–87.7] years, 58.3% female), sarcopenia prevalence was 37.9, 18.6, and 26.1% according to EWGSOP, EWGSOP2, and AWGS 2019, respectively. Sarcopenia as a comorbid disease with high multimorbidity, dementia, diabetes mellitus, and renal impairment had higher odds of institutionalisation incidence. Sarcopenia as a comorbid disease with high multimorbidity, high disease severity, chronic obstructive pulmonary disease, osteoporosis, and renal impairment had higher odds of mortality. <b><i>Conclusion:</i></b> Sarcopenia as a comorbid disease is associated with a higher incidence of institutionalisation and mortality in geriatric rehabilitation inpatients. This highlights the need for in-hospital sarcopenia diagnostics and interventions.