No / OBJECTIVES: To compare the effects of community hospital care on independence for older people needing rehabilitation with that of general hospital care. DESIGN: Randomized, controlled trial. SETTING: Seven community hospitals and five general hospitals in the midlands and north of England. PARTICIPANTS: Four hundred ninety patients needing rehabilitation after hospital admission with an acute illness. INTERVENTION: Multidisciplinary team care for older people in community hospitals. MEASUREMENTS: The primary outcome was the Nottingham extended activities of daily living scale (NEADL); secondary outcomes were the Barthel Index, Nottingham Health Profile, Hospital Anxiety and Depression Scale, mortality, discharge destination, 6-month residence status, and satisfaction with services. RESULTS: Loss of independence at 6 months was significantly less likely in the community hospital group (mean adjusted NEADL change score group difference 3.27; 95% confidence interval 0.26–6.28; P=.03). The results for the secondary outcome measures were similar for the two groups. CONCLUSION: Postacute community hospital rehabilitation care for older people is associated with greater independence.