OBJECTIVES: To compare the utility measurements and quality adjusted life years gained obtained from the EQ-5D and ICECAP-O instruments in a group of older frail people receiving a community program. METHODS: Prospective observational cohort study with baseline and repeated measures follow up of 357 participants and 122 caregivers . Participants were receiving the transition care program, a clearly defined post acute discharge program consisting of case management, medical and nursing support, rehabilitation services and personal and domestic care in one of six community sites in two states of Australia. Quality of life was measured four time points over six months. RESULTS: The ICECAP-O yielded consistently higher utility values at all time points than the EQ-5D. Admission utility scores were 0.55 (0.20) and 0.75(0.16) and at 6 months were 0.60 (0.28) and 0.84 (0.25) for the EQ-5D and ICECAP-O respectively. Using the area under the curve method, the QALYs gained from baseline over six months were modest; however the ICECAP-O gave higher overall QALYs gained than the EQ-5D. The increased QALYs gained with the ICECAP-O could have implications when using it in an economic evaluation of this type of service. CONCLUSIONS: The EQ-5D has been criticised for its potential lack of responsiveness particularly when only small health improvements are expected. The ICECAP-O may represent a better choice for use in evaluating community based programs for older frail people.