Hip fracture results in excess mortality and functional disability. This study sought to identify predictors of mortality and limited functional ability 1 year after hip fracture. We conducted a 1-year follow-up of a prospective population-based inception cohort of 218 hip fracture patients who had been consecutively admitted and discharged from hospital during the previous year. Mortality was observed to be independently associated with poor mental status (relative risk [RR]=6.96; 95% confidence interval [95% CI], 1.73-28.00), prefracture limited functional ability (RR=4.35; 95% CI, 1.32-14.36), institutionalized disposition at discharge (RR = 2.92; 95% CI, 1.02-8.38), and male gender (RR = 2.44; 95% CI, 1.01-5.93). Independent predictors of limited functional ability were prefracture functional disability (RR = 34.14; 95% CI, 3.13-372.33), poor mental status (RR = 9.71; 95% CI, 1.57-59.82), age >80 years (RR = 4.03; 95% CI, 1.48-11.00), and female gender (RR = 3.57; 95% CI, 0.08-0.98). On discharge, special attention and care should thus be given to all patients displaying any of the above predictive factors.