Although many older adults are discharged to skilled nursing facilities (SNFs) after hospitalization, rates of patients recovery afterward are unknown. To examine postacute functional recovery among older adults. This cohort study was conducted among older adults treated in SNFs, then at home with home health care (HHC). Participants were a 5% random sample of Medicare fee-for-service beneficiaries discharged to community HHC after SNF stay from 2014 to 2016 with continuous part A and B enrollment in the prior 6 months. Medicare claims data from 2014 to 2016 were used, including inpatient, SNF, hospice, HHC, outpatient, carrier, and durable medical equipment data and Minimum Data Set (MDS) and Outcome Assessment Information Set (OASIS) for SNF and HHC assessments, respectively. Data were analyzed from July 20, 2020, to June 5, 2022. Frailty was measured with a validated claims-based frailty index (CFI) (range, 0-1; higher scores indicate worse frailty) and categorized into not frail (<0.20), mildly frail (0.20-0.29), and moderately to severely frail (≥0.30). The primary outcome was functional recovery, defined by discharge from HHC with stable or improved ability to perform activities of daily living (ADL). Recovery status was examined at 15, 30, 45, 60, 75, and 90 days after discharge to HHC using OASIS. Covariates were obtained from the MDS admission file at SNF admission, including age, race and ethnicity, cognitive status, functional status, and geographic region. Among 105 232 beneficiaries (mean [SD] age, 79.1 [10.6] years; 68 637 [65.2%] women; 8951 Black [8.5%], 3109 Hispanic [3.0%], and 88 583 White [84.2%] individuals), 65 796 individuals (62.5%) were discharged from HHC services with improved function over 90 days of follow-up. Among 39 436 beneficiaries not recovered, 19 612 individuals (49.7%) had mild frailty and 15 818 individuals (40.1%) had moderate to severe frailty. While 10 492 of 17 576 beneficiaries who were not frail recovered by 45 days (59.7%), 10 755 of 32 212 individuals with moderate to severe frailty had recovered (33.4%). Overall, frailty was negatively associated with functional recovery after adjustment for demographic characteristics, geographic census regions, and health-related variables, with a hazard ratio for moderate to severe frailty of 0.62 (95% CI, 0.60-0.63) compared with nonfrailty. This study found that recovery after posthospitalization SNF stay was particularly prolonged for individuals with frailty. Functional dependence in activities of daily living remained common among individuals with frailty long after discharge home.