Background: Nutritional intervention is increasingly recognised as having an important role in functional rehabilitation for older people. Nonetheless, a greater understanding of the functional benefit of nutritional interventions is needed. Methods: A systematic review and meta-analysis examined randomised controlled trials (RCTs) published between 2007 and 2014 with the aim of determining whether nutritional intervention combined with rehabilitation benefited older people with reduced functional ability. Six electronic databases were searched. RCTs including people aged 65 years and older with reduced physical, social and/or cognitive function were included. PRISMA (Preferred Reporting Items for Systematic Reviews and Meta-Analyses) guidelines were followed, and gradepro computer software (http://gradepro.org) was used for the quality assessment of critical and important outcomes. Included studies considered to be clinical homogenous were combined in a meta-analysis. Results: Of the 788 studies screened, five were identified for inclusion. Nutritional intervention given with functional rehabilitation improved energy and protein intake, although it failed to provide any improvement in final body weight, hand-grip strength or muscle strength. There was no difference between groups in the critical outcomes; balance, cognition, activities of daily living and mortality at long-term follow-up. Nutritional intervention given with functional rehabilitation was associated with an increased likelihood of both mortality (odds ratio = 1.77; 95% confidence interval = 1.13–2.76) and hospitalisation (odds ratio = 2.29; 95% confidence interval = 1.10–4.79) during the intervention. Meta-analysis of the baseline data showed that, overall, the intervention cohort had a lower body weight and cognition. Conclusions: This meta-analysis highlights concerns regarding the quality of the randomisation of participants at baseline. Future high-quality research is essential to establish whether older people with loss of functional abilities can benefit from nutritional intervention.