Cognitive dysfunction commonly occurs among older patients during admission and is associated with adverse prognosis. This study evaluated clinical characteristics and outcome determinants in hospitalized older patients with cognitive disorders. The main outcomes were length of stay, readmission within 30 days, Barthel index (BI) score at discharge, BI score change (discharge BI score minus BI score), and proportion of positive BI score change to indicate change of activities of daily living (ADL) change during hospitalization. A total of 642 inpatients with a mean age of 79.47 years (76–103 years) were categorized into three groups according to the medical history of dementia, and Mini-Mental State Examination (MMSE) scores at admission. Among them, 74 had dementia diagnosis (DD), 310 had cognitive impairment (CI), and 258 had normal MMSE scores. Patients with DD and CI generally had a higher risk of many geriatric syndromes, such as multimorbidities, polypharmacy, delirium, incontinence, visual and auditory impairment, fall history, physical frailty. They had less BI score, BI score change, and proportion of positive BI score change ADL at discharge. (DD 70.0%, CI 79.0%), suggesting less ADL change during hospitalization compared with those with normal MMSE scores (92.9%; p < 0.001). Using multiple regression analysis, we found that among patients with DD and CI, age (p = 0.008) and walking speed (p = 0.023) were predictors of discharge BI score. In addition, age (p = 0.047) and education level were associated with dichotomized BI score change (positive vs. non-positive) during hospitalization. Furthermore, the number and severity of comorbidities predicted LOS (p < 0.001) and readmission (p = 0.001) in patients with cognitive disorders. It is suggested that appropriate strategies are required to improve clinical outcomes in these patients.