Introduction Diarrhoeal diseases are common among children and older adults. Yet, majority of the scientific studies deal with children, neglecting the other vulnerable and growing proportion of the population–the older adults. Therefore, the present study aims to find rural-urban differentials in the prevalence of diarrhoea among older adults in India and its states. Additionally, the study aims to find the correlates of diarrhoea among older adults in India. The study hypothesizes that there are no differences in the prevalence of diarrhoea in rural and urban areas. Methods Data for this study was utilized from the recent Longitudinal Ageing Study in India (2017–18). The present study included eligible respondents aged 60 years and above (N = 31,464). Descriptive statistics along with bivariate analysis was presented to reveal the preliminary results. In addition, binary logistic regression analysis was used to fulfil the study objectives. Results About 15% of older adults reported that they suffered from diarrhoea in the last two years. The prevalence of diarrhoea among older adults was found to be highest in Mizoram (33.5 per cent), followed by Chhattisgarh (30.7 per cent) and Bihar (30.2 per cent). There were significant rural-urban differences in the prevalence of diarrhoea among older adults in India (difference: 7.7 per cent). The highest rural-urban differences in the prevalence of diarrhoea were observed among older adults who were 80+ years old (difference: 13.6 per cent), used unimproved toilet facilities (difference: 12.7 per cent), lived in the kutcha house (difference: 10.2 per cent), and those who used unclean source of cooking fuel (difference: 9 per cent). Multivariate results show that the likelihood of diarrhoea was 17 per cent more among older adults who were 80+ years compared to those who belonged to 60–69 years’ age group [AOR: 1.17; CI: 1.04–1.32]. Similarly, the older female had higher odds of diarrhoea than their male counterparts [AOR: 1.19; CI: 1.09–1.30]. The risk of diarrhoea had declined with the increase in the educational level of older adults. The likelihood of diarrhoea was significantly 32 per cent more among older adults who used unimproved toilet facilities than those who used improved toilet facilities [AOR: 1.32; CI: 1.21–1.45]. Similarly, older adults who used unimproved drinking water sources had higher odds of diarrhoea than their counterparts [AOR: 1.45; CI: 1.25–1.69]. Moreover, older adults who belonged to urban areas were 22 per cent less likely to suffer from diarrhoea compared to those who belonged to rural areas [AOR: 0.88; CI: 0.80–0.96]. Conclusion The findings of this study reveal that diarrhoea is a major health problem among older adults in India. There is an immediate need to address this public health concern by raising awareness about poor sanitation and unhygienic practices. With the support of the findings of the present study, policy makers can design interventions for reducing the massive burden of diarrhoea among older adults in rural India.