Assessing functional status of residents in nursing homes is one way to evaluate the quality of care provided. The purpose of this study was to investigate whether rehabilitation interventions could lead to improved functional independence. A prospective study was carried out to examine the change in activities of daily living (ADL) of 310 residents aged 65 or above over a period of 6 months. About 41.3% (n = 128) received rehabilitation therapy. Functional improvement was observed in 30.6% of the participants. The corresponding figures for stabilization and functional decline were 45.2% and 24.2%, respectively. Using a multinomial logistic regression, we found that factors significantly associated with change in functional status included baseline ADL score, family visit, number of beds in the institution, and transfer to acute hospitals. After adjusting for these confounding variables, change in functional status of those who received rehabilitation and those who did not was not significantly different.