Age-related loss of skeletal muscle mass (SMM) and function (sarcopenia) are associated with poor health outcomes and an economic burden on health care services. An appropriate diet and physical activity have been proposed for prevention and treatment of sarcopenia. Nevertheless, the effects on medical service utilization and costs remain unclear. This study determined the effects of SMM in conjunction with diet quality and physical activity on medical service utilization and expenditure in community-dwelling older Taiwanese.In total, 1337 participants from the Elderly Nutrition and Health Survey in Taiwan (1999-2000) were enrolled. An SMM index [SMMI, calculated by dividing SMM (kg) by height (m2)] was used as the marker of sarcopenia. Participants with the lowest SMMI quartiles (<11.4 kg/m2 for men and 8.50 kg/m2 for women) comprised the high-risk group, and the remainder comprised the low-risk group. Dietary information (dietary diversity: low and high) and physical activity (low and moderate) were obtained at baseline. Annual medical service utilization and expenditure were calculated from National Health Insurance claims until December 31, 2006. Generalized linear models were used to determine the association between the SMMI and annual medical service utilization and costs in conjunction with dietary diversity or physical activity.After 8 follow-up years, regardless of gender, participants in the high-risk group reported significantly more hospitalization (days and expenditure) and total medical expenditure. Participants in the high-risk group who had low dietary diversity made fewer annual outpatient (14%), preventive care (19%), and dental (40%) visits, but exhibited longer hospitalization (102%) than did those who had a low SMMI and high dietary diversity. Similar patterns were observed in the corresponding medical expenditures. The findings were similar when considering physical activity. Being in the low-risk group in conjunction with having high dietary diversity or more physical activity was associated with the lowest annual adjusted mean hospitalization days with expenditure, and also total expenditure.A lower SMMI was associated with more hospitalization days and costs. However, high dietary diversity and more physical activity can attenuate the effects of lower SMMI on medical service utilization and expenditure.