OBJECTIVE To evaluate the role of delirium in the natural history of functional recovery after hip fracture surgery, independent of prefracture status. DESIGN Prospective cohort study. SETTING Orthopedic surgery service at a large academic tertiary hospital, with follow-up extending into rehabilitation hospitals, nursing homes, and the community. PARTICIPANTS One hundred twenty-six consenting subjects older than 65 years (mean age 79 +/- 8 years, 79% women) admitted emergently for surgical repair of hip fracture. MEASUREMENTS Detailed assessment at enrollment to ascertain prefracture status through interviews with the patient and designated proxy and review of the medical record. Interviews included administration of standardized instruments (Activities of Daily Living (ADL) Scale, Blessed Dementia Rating Scale, Delirium Symptom Interview) and assessment of ambulation, and prefracture living situation. Medical comorbidity, the nature of the hip fracture, and the surgical repair were obtained from the medical record. All subjects underwent daily interviews for the duration of the hospitalization, including the Mini-Mental State Examination and Delirium Symptom Interview, and delirium was diagnosed using the Confusion Assessment Methods algorithm. Patients and proxies were recontacted 1 and 6 months after fracture, and underwent interviews similar to those at enrollment to determine death, persistent delirium, decline in ADL function, decline in ambulation, or new nursing home placement. RESULTS Delirium occurred in 52/126 (41%) of patients, and persisted in 20/52 (39%) at hospital discharge, 15/52 (32%) at 1 month, and 3/52 (6%) at 6 months. Patients aged 80 years or older, and those with prefracture cognitive impairment, ADL functional impairment, and high medical comorbidity were more likely to develop delirium. However, after adjusting for these factors, delirium was still significantly associated with outcomes indicative of poor functional recovery 1 month after hip fracture: ADL decline (odds ratio (OR) = 2.6; 95% confidence interval (95% CI), 1.1- 6.1), decline in ambulation (OR = 2.6; 95% CI, 1.03-6.5), and death or new nursing home placement (OR = 3.0; 95% CI, 1.1-8.4). Patients whose delirium persisted at 1 month had worse outcomes than those whose delirium had resolved. CONCLUSIONS Delirium is common, persistent, and independently associated with poor functional recovery 1 month after hip fracture even after adjusting for prefracture frailty. Further research is necessary to identify the mechanisms by which delirium contributes to poor functional recovery, and to determine whether interventions designed to prevent or reduce delirium can improve recovery after hip fracture.