The purpose of this cross-sectional prospective study was to determine the prevalence of anemia among elderly hospitalized patients in Germany and to investigate its association with multidimensional loss of function (MLF). One hundred participants aged 70 years or older from two distinct wards (50 each from an emergency department and a medical ward, respectively) underwent a comprehensive geriatric assessment (CGA) consisting of the following six tools: Barthel Index, mini-mental state examination, clock-drawing test, timed up and go test, Esslinger transfer scale, and Daniels test. MLF as an aggregated outcome was diagnosed when three or more tests of the CGA showed an abnormal result. Anemia was defined according to WHO criteria as a hemoglobin (Hb) concentration of <13 g/dL for men and <12 g/dL for women. The prevalence of anemia was 60 %. Overall, 61 % of patients presented with three or more abnormal results in the six tests of the CGA and, thus, with MLF. Using logistic regression, we found a significant association of both anemia and low Hb concentrations with abnormal outcomes in five tests of the CGA and, therefore, with domain-specific deficits like mobility limitations, impaired cognition, and dysphagia. Furthermore, being anemic increased the odds of featuring MLF more than fourfold. This significant relationship persisted after adjustment for various major comorbidities. Both anemia and geriatric conditions are common in the hospitalized elderly. Given the association of anemia with MLF, Hb level might serve as a useful geriatric screening marker to identify frail older people at risk for adverse outcomes.