Background. Delirium is often considered a transient cognitive syndrome. Its effect on long-term physical function, however, has not been well defined. Methods. In a prospective study of 325 hospitalized community and nursing home elderly, we analyzed the effect of inhospital delirium on subsequent physical function. ADL performance was assessed prior to admission, and at 3 and 6 months after hospital discharge. Results. There was a strong univariate (unadjusted) association between incident delirium and functional decline (p < .02) Delirious subjects lost a mean of almost one ADL, as measured 3 months after hospital discharge. Using multivariate linear regression analysis, with adjusted change in function as the dependent variable, delirium persisted as the sole predictor of loss of function (p = .009) at 3 months after discharge. The functional decline persisted at 6 months after hospital discharge. Conclusion. This finding of a nontransient, perhaps permanent consequence of delirium invites reexamination of the definition of delirium from that of an acute, reversible syndrome to one of acute onset with long-term sequelae.