Hip fractures are a growing problem and new models of care have been called for. However, patients from residential care are rarely considered in these discussions. Hip fracture is a common serious problem for older people in residential care with profound effects on subsequent mobility and quality-of-life. There are no Australian data documenting differences in hospital treatments offered to patients from the community and residential care to inform discussions. In a prospective audit we describe the treatment and 4 month outcomes of patients with fractured hips who were admitted to Flinders Medical Centre in South Australia from the community and residential care between August 1998 and June 1999. Information was collected on prefracture health, types of surgical and rehabilitation treatments and dependency. Of the 215 older adults who were admitted during this time, 183 agreed to participate (119 from community and 64 from residential care). Surgical management of the fracture was not affected by admission accommodation. Those from residential care had short hospital stays, less rehabilitation and access to physiotherapy. Although 61% of those from residential care were classified as independently mobile prefracture, by 4 months this had declined to 32% of survivors. Strategies to improve outcomes in those from residential care include: early identification of those walking independently prefracture with assessment by rehabilitation teams. Inclusion of liaison with community therapists in the clinical pathway and in selected cases use of 'rehabilitation at home' services to provide physiotherapy services should be considered.