Objective. To determine the impact of osteoarthritis (OA) on length of rehabilitation stay, Functional Independence Measure (FIM Instrument) ratings at discharge and followup, functional gain, and percentage of patients discharged home. Methods. We conducted a retrospective cohort analysis using a national registry of US medical rehabilitation inpatients. We obtained standardized data for all patients admitted after a hip fracture between 1994 and 2001. Our primary analytical method was multiple regression analysis. Outcome variables were length of stay, FIM Instrument ratings at discharge and followup, functional gain, and percentage of patients discharged home. The predictor variable was the presence of OA. Covariates were age, sex, race/ethnicity, other comorbidity, admission FIM ratings, total hip replacement, and time to followup. Results. We studied 1,953 patients with OA and 11,441 patients without OA admitted to inpatient rehabilitation facilities after hip fracture. Mean ؎ SD length of stay for patients with OA was 18.1 ؎ 10.0 days versus 16.5 ؎ 8.9 days for those without OA (P < 0.01). After adjusting for age, sex, race/ethnicity, comorbidity, admission FIM ratings, and total hip replacement, OA was associated with a longer rehabilitation stay (1.4 days; P < 0.01) and slightly higher discharge FIM ratings; however, OA was not associated with lower weekly rehabilitation gain, followup FIM ratings, and percentage discharged home. Conclusion. Persons with hip fracture and OA had longer inpatient rehabilitation length of stay than persons without OA, but there were similarities in weekly rehabilitation gain and percentage discharged home.