Older patients often experience a loss of independent physical functioning during the course of an acute illness that requires hospitalization. Although functional outcomes are not usually the focus of care in the hospital, they may be critical determinants of the quality of life, physical independence, cost of care, and prognosis among older patients.Based on a conceptual model of the dysfunctional syndrome (functional decline associated with hospitalization) we developed, implemented and evaluated a multi-component intervention termed Acute Care for Elders (ACE), in hospital medical units of two urban hospitals. ACE is a model of care that combines the principles of geriatric assessment and quality improvement. The ACE intervention includes a prepared environment (environmental modification), patient-centered care (interdisciplinary assessment), interdisciplinary team rounds and planning for home, and medical care review. Results of randomized clinical trials support the effectiveness of ACE to improve outcomes of hospitalization for older patients. Improved functional status, lower risk of nursing home placement and higher levels of patient and professional satisfaction with care are achievable with ACE. The challenges of establishing an ACE unit in community hospitals can be met through a systematic process of implementation and evaluation.ACE is a multi-component intervention that is potentially transportable to other hospital units, with benefits for patients, health professionals and hospital administrators.