Abstract Background Sarcopenia is a clinical manifestation of adverse ageing, characterised by progressive loss of muscle mass and function. Diagnosis requires assessment of muscle quantity and quality; ultrasound represents an emerging tool for this. However, ultrasound muscle assessment may be impacted by fluid balance. This is particularly important when assessing for acute sarcopenia in hospitalised patients, where fluid disturbance often occurs. The primary aim of this study was to characterise the impact of fluid status on ultrasound muscle assessment, such that this may be accounted for in sarcopenia diagnostics. Methods This Multidimensional Cross-sectional study involved 80 participants, who were inpatients at QEHB, a large UK tertiary centre. Fluid status was evaluated clinically and quantified using Bioelectrical Impedance Analysis (BIA). Muscle quantity was measured using Bilateral Anterior Thigh Thickness (BATT) with Rectus Femoris (RF) echogenicity used to assesses muscle adiposity and hence provide an inverse measure of muscle quality. Results A significant positive correlation was found between fluid status, measured using BIA, and BATT as a measure of muscle quantity, in males (rs = 0.662, p < 0.001) and females (rs = 0.638, p < 0.001). A significant negative correlation was found between fluid status and RF echogenicity (rs=-0.448, p < 0.001). Conclusions These findings demonstrate associations between fluid balance and ultrasound assessment of muscle quantity and quality. Given the emerging use of ultrasound muscle assessment in sarcopenia diagnosis, there is a need to account for this in clinical practice. Future research should focus on the development of a corrective equation allowing assessment of muscle quantity and quality which account for changes in fluid status, hence aiding accurate diagnosis of sarcopenia.