Protein-energy malnutrition (PEM) is a treatable disease with high prevalence among hospitalized patients. It can cause significant increases in the duration of hospitalization and costs. PEM is especially important for health systems since malnourished patients present higher morbidity and mortality. The objective of the present study was to assess the evolution of nutritional status (NS) and the effect of malnutrition on clinical outcome of patients at a public university hospital of high complexity in Brazil. Patients hospitalized in internal medicine (n = 54), oncology (n = 43), and infectious diseases (n = 12) wards were included. NS was evaluated using subjective global assessment up to 48 h after admission, and thereafter at intervals of 4-6 days. On admission, patients (n = 109) were classified as well-nourished (n = 73), moderately malnourished or at risk of malnutrition (n = 28), and severely malnourished (n = 8). During hospitalization, malnutrition developed or worsened in 11 patients. Malnutrition was included in the clinical diagnosis of only 5/36 records (13.9% of the cases, P = 0.000). Nutritional therapy was administered to only 22/36 of the malnourished patients; however, unexpectedly, 6/73 well-nourished patients also received commercial enteral diets. Complications were diagnosed in 28/36 malnourished and 9/73 well-nourished patients (P = 0.000). Death occurred in 12/36 malnourished and 3/73 well-nourished patients (P = 0.001). A total of 24/36 malnourished patients were discharged regardless of NS. In summary, malnutrition remains a real problem, often unrecognized, unappreciated, and only sporadically treated, even though its effects can be detrimental to the clinical course and prognosis of patients. The amount of public and private funds unnecessarily dispersed because of hospital malnutrition is significant.