Rationale: Although clinical trials have found that pulmonary rehabilitation (PR) can reduce the risk of readmissions after hospitalization for a chronic obstructive pulmonary disease (COPD) exacerbation, less is known about PR’s impact in routine clinical practice. Objectives: To evaluate the association between initiation of PR within 90 days of discharge and rehospitalization(s). Methods: We analyzed a retrospective cohort of Medicare beneficiaries (66 years of age or older) hospitalized for COPD in 2014 who survived at least 30 days after discharge. Measurements and Main Results: We used propensity score matching and estimated the risk of recurrent all-cause rehospitalizations at 1 year using a multistate model to account for the competing risk of death. Of 197,376 total patients hospitalized in 4,446 hospitals, 2,721 patients (1.5%) initiated PR within 90 days of discharge. Overall, 1,534 (56.4%) patients who initiated PR and 125,720 (64.6%) who did not were rehospitalized one or more times within 1 year of discharge. In the propensity-score–matched analysis, PR initiation was associated with a lower risk of readmission in the year after PR initiation (hazard ratio, 0.83; 95% confidence interval, 0.77–0.90). The mean cumulative number of rehospitalizations at 1 year was 0.95 for those who initiated PR within 90 days and 1.15 for those who did not (P < 0.001). Conclusions: After hospitalization for COPD, Medicare beneficiaries who initiated PR within 90 days of discharge experienced fewer rehospitalizations over 1 year. These results support findings from randomized controlled clinical trials and highlight the need to identify effective strategies to increase PR participation.