We determined the effect of geriatric rehabilitation of hip fracture patients on mortality, length of hospital stay, and functional recovery. In a randomized, controlled intervention study, 243 community dwelling hip fracture patients over 64 years of age were randomly assigned to 2 rehabilitation groups. The intervention group (n = 120) was referred to a geriatric ward for team rehabilitation, and the controls (n = 123) to local hospital wards for standard care. The median length of total hospital stay after a hip fracture operation was 34 (95% CI 28-38) days in the intervention group and 42 (95% CI 35-48) days in the control group (p = 0.05). The intervention group recovered instrumental activities of daily living faster (p = 0.05). Direct costs of medical care during the first year did not differ remarkably.