Background: High-sensitivity C-reactive protein (hs-CRP) is associated with a risk of causing diabetes mellitus and ischemic stroke. However, the association between hs-CRP levels and functional outcome after small-artery occlusion (SAO) is unknown. Methods: Data for 836 patients diagnosed with SAO were collected from the Department of Neurorehabilitation of Huanhu Hospital. Hs-CRP values were classified according to quartiles (<0.67, 0.67 to <1.46, 1.46 to <3.46, and ≥3.46 mg/L). We examined the relationship between hs-CRP levels on admission and modified Rankin Scale (mRS) scores using univariate and multivariate analyses. We further performed subgroup analyses of patients with and without diabetes. Results: Patients in the highest hs-CRP quartile had a significantly higher risk of an unfavorable outcome. In the non-diabetes subgroup, the elevated hs-CRP quartiles were associated with higher mRS scores. In the diabetes subgroup, no statistically significant association was observed between hs-CRP levels and mRS. Conclusions: Elevated hs-CRP level on admission was associated with a poor functional outcome 3 months after SAO, especially among nondiabetes patients. However, no significant associations were observed in patients with diabetes.