OBJECTIVES The purpose of this prospective cohort study was to determine the extent and determinants of hospitalization in a population sample of older disabled people. DESIGN A longitudinal cohort study. SETTING Noninstitutionalized disabled people in the region of Augsburg, South Germany. PARTICIPANTS The study population included 2427 persons, aged 60 years and older, who, between 1991 and 1993, applied for benefits from the statutory health insurance system provided to the most severely handicapped noninstitutionalized persons. MEASUREMENTS Baseline variables were derived from a standardized medical examination. Information about hospitalization and mortality until June 30, 1996, was extracted from records of the pertinent health insurance plan. Rate ratios (RRs) of hospitalization were derived from a multivariable Poisson regression model corrected for the correlation of multiple hospitalizations for each person. RESULTS The overall absolute hospitalization rate was 6.7 hospitalizations per 10 person-years at risk, with a mean length of stay per hospitalization of 19.2 days. Multivariable analysis showed an inverse association of age and hospitalization. Persons cared for primarily by their children had a lower rate of hospitalization (RR = 0.83) than persons relying mainly on professional home care. Medical causes of disability and dependency with respect to activities of daily living were unrelated to the hospitalization rate. A total of 1415 persons (58.3%) died during follow-up. The rate of hospitalization was twice as high among these subjects compared with others. The hospitalization rate increased rapidly during the last year of life, with a peak increase in the last 3 months. CONCLUSIONS This study expands the current inadequate database on hospitalization in Europe. Further expansion is necessary for the efficient allocation of medical resources to older people, a group steadily increasing in numbers.