The hostages' condition and scenes of Hamas forcing them to speak in a handover ceremony sparked outrage in Israel and could increase pressure on Prime Minister Benjamin Netanyahu to extend the ceasefire beyond its current six-week phase.
Netanyahu has signalled he would resume the war, even if that means leaving dozens of hostages in captivity.
"President (Donald) Trump completely agreed with me: We will do everything to return all the hostages, but Hamas will not be there," Netanyahu said after the exchange.
Civilians Eli Sharabi, 52; Ohad Ben Ami, 56; and Or Levy, 34, were among about 250 people taken during the Hamas-led attack on Israel on October 7, 2023, that sparked the war.
Israelis' joy turned to shock and tears when they saw their emaciated state.
Later on Saturday, Israel released 183 Palestinian prisoners, some also appearing gaunt and weak.
The Red Crescent said seven were taken to hospitals. Many Palestinians released during the ceasefire have appeared emaciated and have allegedly endured abuse in custody.
It was the fifth exchange since the ceasefire began on January 19. Twenty-one hostages have now been freed.
The Red Cross said it was "increasingly concerned about the conditions surrounding release operations" and urged all parties to ensure releases are dignified and private.
An Israeli Health Ministry representative, Dr Hagar Mizrahi, noted "severe malnutrition" and a "significant decrease" in body weight in the hostages released, as families again feared for the dozens of others still held in Gaza.
"If anyone had any doubt about how urgent it is to bring everyone back ... today we got a wake-up call," Moshe Or, brother of hostage Avinatan Or, told a weekly rally in Tel Aviv.
Gal Hirsch, Netanyahu's co-ordinator for hostages, said that "we will not remain silent about this. A message has been passed on to the mediators, and action will be taken accordingly".
Hamas' military wing said it had made efforts to preserve the hostages' lives "despite the (Israeli) bombardment."
The ceasefire's first phase calls for the release of 33 hostages and nearly 2000 Palestinian prisoners, the return of Palestinians to northern Gaza and an increase in humanitarian aid to the devastated territory.
Israel says Hamas has confirmed eight of the 33 hostages are dead.
US President Donald Trump's stunning proposal to transfer the Palestinian population out of Gaza could complicate talks over the second and more difficult phase, when Hamas is to release dozens more hostages in return for a lasting ceasefire. His proposal was welcomed by Israel but rejected by Palestinians and most of the international community.
Hamas may be reluctant to free more hostages if it believes the US and Israel are serious about depopulating Gaza, which rights groups say would violate international law.
Netanyahu on Saturday directed a delegation to go to Qatar to discuss the ceasefire agreement's technical details, and the security cabinet will meet about negotiations on the truce's second phase.
Sharabi and Ben Ami were captured from Kibbutz Beeri, one of the farming communities hardest hit by the Hamas attack, while Levy was taken from the Nova music festival.
They are only now learning the fate of some family members, according to Israeli media.
Sharabi's wife and two teenage daughters were killed, and his brother Yossi died in captivity.
Levy's wife was killed. Ben Ami's wife, Raz, was released during a ceasefire in November 2023 that saw more than 100 hostages freed.
"It's over, it's over," Levy's brother Michael said as they embraced.
"I left XXL, I came back medium," Ben Ami said as he hugged his daughters.
One of them, Ella, told Israeli channel 12 that "it took me a moment to realise that this was my father".
The Palestinian prisoners released include 18 serving life sentences for deadly attacks on Israelis, 54 serving long-term sentences and 111 Palestinians from Gaza detained after the October 7 attack but not tried for any crime. All are men, ages 20 to 61.
The war — the deadliest and most destructive fighting ever between Israel and Hamas — could resume in early March if no agreement is reached.
