Objective: The present study aimed to assess the functional status of children diagnosed with COVID-19 at the time of hospitalization and the associations with clinical features. Methods: This prospective cohort study was carried out with children diagnosed with COVID-19 admitted to a tertiary hospital. The patients' functioning was assessed using the pediatric Functional Status Scale (FSS). Results: A total of 62 children with a median age of 3 years old were included in the study, and 70% had some comorbidity prior to the diagnosis of COVID-19. The median length of stay was nine days, during which period five patients died. The FSS assessment of the sample showed that approximately 55% had some functional alteration. The group of patients with the highest FSS scores presented a lengthier hospital stay (p = 0.016), required more oxygen therapy (p < 0.001), mechanical ventilation (p = 0.001), and intensive care unit admissions (p = 0.019), and had more cardiac (p = 0.007), neurological (p = 0.003), and respiratory (p = 0.013) comorbidities. In the multivariate analysis, there was an association between the dependent variable length of stay and the total FSS score (b = 0.349, p = 0.004) and the presence of comorbidities (b = 0.357, p = 0.004). Conclusions: We observed that more than half of the children hospitalized due to COVID-19 had some level of functional change. Greater alterations in functional status were associated with the presence of previous comorbidities, a greater need for ventilatory support, and longer hospital stays.