Aim The present study aimed to identify the factors affecting the subjective sleep quality in elderly inpatients. Methods The participants were 290 older adults admitted in three general hospitals. Data were collected using a structured questionnaire consisting of scales for general characteristics, sleep quality, activities of daily living, instrumental activities of daily living and depression. Collected data were analyzed by descriptive statistics, t‐test, one‐way anova, Scheffé post‐hoc, Pearson's correlation coefficient and stepwise multiple regression. Results There were statistically significant differences in sleep quality according to age, education level, marital status, monthly income and number of cohabitants. The most powerful predictor of sleep quality was depression (P < 0.01, R2 = 0.30). Five variables, depression, perceived health status, diagnosis, number of cohabitants and duration of hospitalization; explained 43.0% of the total variance in sleep quality. Conclusions Elderly inpatients suffered from low sleep quality, and depression affected their sleep. We should develop and apply hospital‐tailored sleep interventions considering older adults' depression, and then hospitalized older adults' sleep could improve. Furthermore, it is useful to identify other sleep‐related factors. Geriatr Gerontol Int 2017; 17: 471–479.