Age-related muscle wasting can compromise functional abilities of the elderly. Protein intake stimulates muscle protein synthesis; however, ageing muscle is more resistant to stimuli. This double-blinded, randomized, controlled trial is one of the first registered studies to evaluate the effects of a supplement of marine protein hydrolysate (MPH) on measures of physical function and strength. Eighty-six older adults received nutritional supplements containing 3 g of MPH or a placebo for up to 12 months. Short Physical Performance Battery (SPPB), grip strength and gait speed were measured, and dietary intake was registered at baseline, 6 months, and 12 months. No difference was found between the intervention and control groups in mean change in SPPB (independent sample t-test, p = 0.41) or regarding time trend in SPPB, grip strength, or gait speed (linear mixed model). The participants in our study were well functioning, causing a ceiling effect in SPPB. Further, they had sufficient protein intake and were physically active. Differences in physical function between those completing the intervention and the dropouts might also have created bias in the results. We recommend that future studies of MPH be carried out on a more frail or malnourished population.