Background and Objectives Hospitalization by Covid‐19 can cause persistent functional consequences after hospital discharge due to direct and indirect effects of SARS‐COV‐2 in several organs and systems of the body added to post‐intensive care syndrome and prolonged bed rest. These impacts can lead to dependency in activities of daily living, mainly in older people due to aging process and functional decline. This study aimed to compare the effects of hospitalization by Covid‐19 on functional capacity of adults and older people and to identify its associated factors. Methods Cross‐sectional observational study of 159 survivors of hospitalization by Covid‐19 after 1 month from discharge at Hospital das Clínicas of the University of São Paulo, divided into groups: adults (aged < 60 years) and older people (aged ≥ 60 years). Those who did not accept to participate, without availability or without ability to understand the questionnaires were excluded. Functional capacity was assessed by the Barthel Index and patients were classified according to their scores. Data analysis was performed in JASP Statistics program and the sample was compared between the age groups. Wilcoxon test was applied to compare before and after periods, Mann–Whitney test was used for between groups comparison. We adopted alpha = 0.05. Results The total Barthel Index median score was lower 1 month after hospital discharge than in the pre‐Covid‐19 period. Older people had worse functional status than adults before and also showed greater impairment after hospital discharge. Both groups showed lower Barthel Index classification than before, and older people presented more functional dependence than adults in both periods. Age, sarcopenia and frailty were associated factors. Discussion Hospitalization by Covid‐19 impacts functional capacity after 1 month from discharge, especially in older people. Age, sarcopenia and frailty are associated factors. These results suggest need for care and rehabilitation of Covid‐19 survivors.