To examine whether hospital-based physical therapy is associated with functional changes and early hospital readmission among hospitalized older adults with community-acquired pneumonia and declining physical function. Study design was a retrospective observation study. Participants were community-dwelling older adults admitted to medicine floor for community-acquired pneumonia (n = 1,058). Their physical function using Katz activities of daily living (ADL) Index declined between hospital admission and 48 hours since hospital admission (Katz ADL Index 6→5). The intervention group was those receiving physical therapy for ≥ 0.5 hour/day. Outcomes were Katz ADL Index at hospital discharge and all-cause 30-day hospital readmission rate. The intervention and control groups did not differ in the Katz ADL Index at hospital discharge (p = 0.11). All-cause 30-day hospital readmission rate was lower in the intervention than in control groups (OR = 0.65, p = 0.02). Hospital-based physical therapy has the benefits toward reducing 30-day hospital readmission rate of acutely ill older adults with community-acquired pneumonia and declining physical function.Key words: hospitalization, patient outcome assessment, physical therapy, pneumonia Functional decline in older adults is common and occurs in up to one-third of recently hospitalized older adults [1]. The hospital environment accelerates the reduction of functional reserve implicated factors include forced immobilization, disorientation due to unfamiliar hospital environments, and frequent orders not to eat by mouth [2][3][4][5][6]. In fact, hospitalized older adults spend more than 70% of their time lying in bed due to acute medical conditions, despite having the ability to walk [4].Functional decline during or after hospitalization is associated with adverse health outcomes, prolonged hospital stays due to more frequent occurrences of hospital complications, such as delirium; and more frequent episodes of early hospital readmissions and even higher long-term mortality rate [7][8][9][10][11][12].