An estimated 14–20% of people infected with COVID-19 require medical care. The aim of the present study was to evaluate physical function, cognitive function, and daily activities in patients hospitalized due to COVID-19, and to investigate differences depending on age and admission to the intensive care unit (ICU). This prospective descriptive cross-sectional study included a consecutive sample of 211 patients (mean age 65.1 years, 67.3% men) hospitalized due to COVID-19 in Sweden. Data regarding physical function and daily activities were collected in hospital from July 2020 to February 2021. The average length of hospital stay was 33.8 days, and 48.8% of the patients were admitted to the ICU. Physical function (grip- and lower body strength) was reduced in both groups, and significantly more in the older group, ≥65 years old, compared to the younger. Furthermore, the older group also had significantly less ability to perform activities in daily life, and had significantly reduced cognitive function as compared to the younger age group. In patients treated in the ICU, physical impairments as well as the activity level were significantly more pronounced compared to patients not treated in the ICU. Patients hospitalized due to COVID-19 are physically impaired, have mild cognitive impairments, and have difficulties performing daily activities. The findings in this study indicate the need for out-patient follow-up and rehabilitation for patients hospitalized due to COVID-19, especially in older patients and patients treated in the ICU.