Aim: This study was designed to investigate the perceptions of hospitalized older adults and nurses regarding the importance and observance of dignity, and, in addition, to address the relationship between the importance and observance of dignity and individual social variables in nurses and hospitalized older adults, and the relationship between importance and observance of dignity in older adults and hospital wards and bed layouts. Design: A cross-sectional study. Methods: Convenience sampling was used to select 400 hospitalized older adults and 146 nurses in Kashan University of Medical Science (KAUMS) hospitals, Iran. Data were collected using a demographic questionnaire, and a dignity scale including three fields: privacy, communication, and autonomy. The data were described using descriptive statistics, and analyzed via the one-way ANOVA, t- test, Pearson correlation coefficient, and linear regression model. Results: Over half of the older adults were female (57%), and 76.5% were married. More than 60% of older adults believed that dignity had a high degree of importance and that observance of dignity was at a good level. The majority of nurses rated the importance and observance of dignity at weak to moderate levels (p < 0.0001). Conclusion: Due to the difference in viewpoints between older adults and nurses regarding dignity, barriers to the observance of dignity as perceived by nurses should be surveyed.