Nowadays pulmonary diseases are an increasingly important cause of morbidity and mortality. Diaphragmatic breathing is a controlled-breathing technique that aims to optimize thoracoabdominal movements. The aim of this study was to apply a respiratory and musculoskeletal physiotherapy program in institutionalized older adults and to assess the effects on their pulmonary function tests and oxygen saturation. A randomized double-blind clinical trial was conducted with thirty institutionalized older adults, randomly assigned to a control group (CG), who conducted musculoskeletal exercises; or an experimental group (EG) who, in addition, carried out diaphragmatic breathing, administered for eight weeks, three times/week. Outcomes were pulmonary function variables (forced vital capacity, FVC; forced expired volume at 1 s, FEV1; the FEV1/FVC ratio) and oxygen saturation (SpO2) before and after treatment. Normality of the distributions was tested with Saphiro-Wilk and the pre-post improvement was assessed with a two-sample Mann-Whitney test. Significance level was corrected for multiple comparisons using Benjamini-Hochberg correction (p < 0.04). There was a clinically significant improvement of FVC and FEV1 for the EG. Moreover, the EG showed a statistically significant increase of SpO2 (p = 0.028) after treatment when compared to CG. A physiotherapy program combining breathing and musculoskeletal exercises, improved respiratory parameters in institutionalized older adults.