Background: hip fractures commonly have an impact on older adults’ health. Surgical treatment aims to reduce pain and promote functional ability. However, developing adverse health outcomes or complications post-hip surgery may impede older patients’ recovery to return to functional ability as pre-fracture. We aimed to examine the association of personal factors and adverse health outcomes during hospitalization and post-hospital discharge on the functional ability of older people undergoing hip surgery. Methods: a total of 120 older people with hip fractures who were scheduled for surgery at three tertiary hospitals and met the inclusion criteria were recruited for this study. Data were obtained at admission, before discharge, and during the two-week postoperative follow-up using the Demographic, Hip Dysfunction and Osteoarthritis Outcome Score, Joint Replacement, the Confusion Assessment Method (CAM) Thai version, and Health Outcome Questionnaires. Descriptive statistics and multiple logistic regression analyses were performed to analyze the data. Results: most participants were female, with a mean age of 78.10 years (range = 60–93; SD = 8.37). The most common adverse health outcome during hospitalization was urinary tract infection, followed by delirium, pneumonia, deep vein thrombosis, and surgical site infection. At two weeks immediately post-hospital discharge, 16 participants experienced unpleasant events, including delirium, urinary tract infection, surgical site infection, and pneumonia. The significant predictors of poor functional ability at two weeks immediately post-hospital discharge were old age (OR = 1.114, p = 0.001), subtrochanteric fracture (OR = 13.48, p = 0.008), and type of surgery (OR = 4.105, p = 0.049).