This observational study investigated the impact of hyponatremia resolution on the results of a comprehensive geriatric assessment (CGA) in 150 patients with age ≥70 years and serum sodium <130 mEq/L. The test battery including Barthel index of Activities of Daily Living (ADL) and various tests of neurocognitive function, motor performance and mood stability was applied on admission and at discharge. Changes of individual test results (Δ) were analyzed and normonatremic patients matched for age, gender, and ADL served as reference group. Most CGA test results improved. The improvement was more pronounced in the hyponatremia group with respect to ADL (ΔADL: 14.3 ± 17.1 vs. 9.8 ± 14.7; p = 0.002) and MMSE (ΔMMSE: 1.8 ± 3.0 vs. 0.7 ± 1.9; p = 0.002). Effect sizes were small (i.e., >0.2) in the overall analysis for ΔADL and ΔMMSE and moderate (i.e., >0.5) for ΔMMSE in the euvolemic subgroup. Beneficial effects on ΔADL and ΔMMSE were only observed in the subgroup of patients in which [Na + ] was raised by >5 mEq/L and multivariable linear regression analysis confirmed [Na + ] increase to be an independent predictor of MMSE improvement. Resolution of hyponatremia has a beneficial impact on the geriatric patients’ overall functional status, in particular in euvolemic cases.