Low alanine aminotransferase (ALT) blood levels are associated with frailty and poor outcome in older adults. Therefore, we studied the association between ALT blood levels before rehabilitation and rehabilitation outcome in older adults following hip fracture surgery. A total of 490 older adults (age>60 years, mean age: 82.9±6.7 years, 82.0% women) admitted to rehabilitation following hip fracture surgery were included. The rehabilitation outcome was assessed by Functional Independence Measure (FIM) scores. ALT blood levels were documented between 1 and 6 months before rehabilitation. Patients with ALT blood levels over 40 IU/l possibly consistent with liver injury were excluded. The cohort was divided into two groups: patients with ALT more than 10 IU/l and patients with ALT less than or equal to 10 IU/l. Upon rehabilitation discharge, the FIM outcome measures (motor, cognitive, gain, efficiency) were significantly higher in patients with ALT more than 10 IU/l relative to patients with ALT less than or equal to 10 IU/l (P<0.05). A logistic regression analysis adjusted for age and sex showed that patients with ALT more than 10 IU/l were more likely to have higher (second to fourth upper quartiles) total FIM scores (>50), cognitive FIM scores (>16), and FIM efficiency (>0.228) upon rehabilitation discharge (odds ratio=1.56–1.78). However, this association was no longer significant following adjustment also for admission total FIM score, cognitive impairment, cancer, and albumin serum levels. High-normal ALT blood levels before rehabilitation are associated with a better rehabilitation outcome in older adults following hip fracture surgery. It may be used when data on admission FIM score, cognitive impairment, cancer, and albumin serum levels are not available.