BACKGROUND/OBJECTIVES: Iron deficiency is common in older patients. We investigated whether iron deficiency is an independent risk factor for functional impairment, low muscle function, fatigue, and rehabilitation progress in older hospitalized patients. SUBJECTS/METHODS: Two hundred twenty-four patients (age range 65-95 years; 67% females) who were consecutively admitted to a geriatric acute care ward participated in this prospective longitudinal observational study. Ferritin, iron, transferrin in serum, and blood hemoglobin were measured and current iron supplementation was recorded. Fatigue and comorbidity were measured using the fatigue severity scale and Charlson Comorbidity Index, respectively. Barthel Index, handgrip strength, and isometric knee extension strength were conducted at the time of hospital admission and before discharge. RESULTS: Ninety-one (41%) patients had iron deficiency in which the majority had functional iron deficiency (78/91, 86%). Absolute iron deficiency with and without anemia was diagnosed in 12 (13%) and one patients, respectively. Barthel Index and handgrip and knee extension strength significantly improved during hospitalization in iron deficiency and non-iron deficiency groups. Knee extension strength showed better improvement in iron-deficient patients receiving iron supplementation and iron supplementation during hospital stay was the main predictor for improvement in knee extension strength. Comorbidity, iron deficiency, and changes in handgrip strength were the major independent risk factors for poor improvement in Barthel Index during hospitalization. There were significant associations between patients' fatigue and iron deficiency, comorbidity, and female gender. CONCLUSION: Iron deficiency is an independent risk factor for fatigue and poor functional recovery among older hospitalized patients. Iron supplementation seems to be capable of improving functional performance.