Background: Low muscle strength and muscle mass are associated with adverse outcomes in older hospitalized patients. The aim of this study was to assess the association between cognitive functioning and muscle strength and muscle mass in hospitalized older patients. Methods: This prospective inception cohort included 378 patients aged 70 years or older. At admission patients were assessed for cognitive functioning by use of the Six-Item Cognitive Impairment Test (6-CIT). Muscle strength and muscle mass were assessed using handheld dynamometry and segmental multifrequency bioelectrical impedance analysis, within 48 h after admission and on day 7, or earlier on the day of discharge. Results: The data of 371 patients (mean age ± standard deviation 80.1 ± 6.4 years, 49.3% female) were available for analyses. The median (interquartile range) 6-CIT score was 4 (0–8) points. At admission, lower cognitive functioning was associated with lower muscle strength, lower skeletal muscle mass (SMM), lower appendicular lean mass, and lower SMM index. Cognitive functioning was not associated with change in muscle strength and muscle mass during hospitalization. Conclusion: This study further strengthens evidence for an association between lower cognitive functioning and lower muscle strength and muscle mass, but without a further decline during hospitalization.