Introduction Evaluations of rehabilitation potential are an everyday occurrence, yet the concept is poorly understood and there is a lack of understanding about the reasoning process. This study aimed to explore how occupational therapists and physiotherapists evaluated the rehabilitation potential of older people following an acute hospital admission. Method Focused ethnography was utilised, primarily using observation, interviewing and review of records within one acute medical ward in a general hospital in the United Kingdom. Five patient participants gave consent for their episode of care to be studied, for interactions with professionals to be observed and for their clinical records to be reviewed. Three occupational therapists and two physiotherapists then participated in individual interviews. Findings Thematic analysis of data led to the identification of a four-stage reasoning process. The four stages are as follows: gathering baseline information; provision of curative and supportive interventions; provision and monitoring of rehabilitative interventions; the evaluation of rehabilitation potential and decision about the subsequent pathway. Conclusions The reasoning process illustrates the professional reasoning of occupational therapists and physiotherapists when evaluating rehabilitation potential for older adults in acute care. However, it also highlights vulnerabilities to professional reasoning which may contribute to subjectivity, inconsistency or risk to patients.