Background: Sleep apnea is increasingly being recognized as 1 of the important, modifiable risk factors of stroke and cardiovascular diseases. Sleep apnea is thought to impair the functional recovery following stroke. Hence, we evaluated the patients with acute ischemic stroke for prevalence of sleep apnea and compared the functional outcomes of patients with and without sleep apnea, at 3rd month of acute ischemic stroke. Method: This study was conducted in Kasturba Medical College (KMC) hospital, Manipal, India, between May 2015 and August 2016. We included 102 consecutive patients of acute ischemic stroke with hemiplegic upper limb power of Medical Research Council (MRC) 3 or less. Sleep apnea was diagnosed in these patients using the sleep disordered Questionnaire, Berlin Questionnaire, and Epworth sleepiness scale. Functional outcome was measured using Barthel score on day 7 and at 3rd month following the onset of stroke. Result: Out of 102 patients, sleep apnea was present in 31 (30.6%) patients, more in males (67.7%) and elderly. Hypertension was present in 66.6% of patients with sleep apnea. NIHSS score at admission did not differ between the 2 groups. At 3rd month, the Barthel score calculated was better among patient with no apnea, but this was not statistically significant (P = .119). When mean Barthel score at baseline and 3rd month was calculated using repeated measure Analysis of Variance (ANOVA) between the 2 groups, gain in functional independence in no apnea group was statistically significant (P < .001). Conclusion: Sleep-disordered breathing is an independent risk factor for stroke, and sleep apnea is also associated with other known stroke risk factors like hypertension. In acute ischemic stroke, sleep apnea has a negative impact on functional recovery. Sleep apnea is amenable to treatment and should be considered in patients with acute ischemic stroke to improve the chance of recovery, and to reduce the risk of recurrence.