Background and Objectives: Hip fracture surgery, which affects quality of life, can be a major challenge in geriatric populations. Although sarcopenia is known to be associated with postoperative outcomes, there are few studies on the association between sarcopenia and postoperative acute kidney injury (AKI) in this population. We investigated the association between sarcopenia and postoperative AKI in elderly patients following hip fracture surgery. Materials and Methods: We retrospectively reviewed the records of patients who underwent hip fracture surgery at our institution from March 2019 to December 2021. Patients under the age of 65, patients with no preoperative computed tomography (CT) scans and patients with inappropriate cross-sectional images for measurement were excluded. The psoas-lumbar vertebral index (PLVI), which is the ratio of the average area of both psoas muscles to the area of the fourth lumbar vertebral body, was measured from preoperative CT scans. Sarcopenia was defined as a PLVI within the lowest 25% for each sex, and patients were categorized into sarcopenic and nonsarcopenic groups. The occurrence of AKI was determined based on the serum creatinine level within postoperative day 7 using the Kidney Disease Improving Global Outcomes (KDIGO) guidelines. Univariate and multivariate logistic regression analyses were performed to evaluate the associations between clinical variables and the occurrence of AKI. Results: Among the 348 enrolled patients, 92 patients were excluded, and 256 patients were analyzed. The PLVI cutoff values for defining sarcopenia lower than 25% for male and female patients were 0.57 and 0.43, respectively. The overall incidence of AKI was 18.4% (47 patients), and AKI occurred more frequently in sarcopenic patients than in nonsarcopenic patients (29.7% vs. 14.6%, p = 0.007). According to the multivariate logistic regression, which included all variables with a p value < 0.05 in the univariate analysis and adjusted for age, body mass index (BMI) and American Society of Anesthesiologists (ASA) physical status, sarcopenia was revealed to be an independent predictor of postoperative AKI (odds ratio = 5.10, 95% confidence interval = 1.77–14.77; p = 0.003). Conclusions: Preoperative sarcopenia, which corresponds to the lowest quartile of PLVI values, is associated with postoperative AKI among elderly patients who underwent hip fracture surgery.