Background and Purpose Many patients experience post‐COVID‐19 functional limitations. This study aimed to monitor the functional improvement of patients over 3 months of follow‐up and determine the risk factors. Methods This prospective cohort study evaluated 100 hospitalized patients who recovered from COVID‐19 infection. The mean age was 53.2 ± 13.1 years. Fifty‐nine had at least one comorbid condition. The mean lengths of the hospital and ICU stays were 7.8 ± 3.3 and 5.3 ± 2.5 days, respectively. The functional status of the patients was evaluated using functional independence measure (FIM) and post‐COVID‐19 functional status (PCFS) questionnaires at four time‐points of discharge, 1 week, 1 month, and 3 months after discharge. Results Mean FIM score was 107.2 ± 17.4 at the time of discharge, 113.3 ± 14.9 at 1 week, 120.3 ± 10.2 at 1 month, and 124.3 ± 6.4 at 3 months after discharge ( p < 0.001). The PCFS score was 2.71 ± 1.25 at discharge, 2.09 ± 1.3 at 1 week, 1.14 ± 1.1 at 1 month, and 0.64 ± 0.59 at 3 months after discharge ( p < 0.001). Female sex, older age, and the lengths of hospital and ICU stays were negatively correlated with the functional status score. Discussion Post‐COVID‐19 functional limitations are observed in hospitalized patients and improve over 3 months after discharge. Female sex, older age, longer hospital, and ICU stays are risk factors that negatively impact functional status.