Importance: A substantial number of patients discharged to skilled nursing facilities (SNFs) after heart failure (HF) hospitalization experience regression in function or do not improve. Delirium is one of few modifiable risk factors in this patient population. Therefore, understanding the role of delirium in functional recovery may be useful for improving outcomes., Objective: To assess the association of delirium with 30-day functional improvement in patients discharged to SNFs after HF hospitalization., Design, Setting, and Participants: This retrospective cohort study included patients hospitalized for HF in 129 US Department of Veterans Affairs hospitals who were discharged to SNFs from October 1, 2010, to September 30, 2015. Data were analyzed from June 14 to December 18, 2020., Exposures: Delirium, as determined by the Minimum Data Set (MDS) 3.0 Confusion Assessment Method, with dementia as a covariate, determined via International Classification of Diseases, Ninth Revision (ICD-9) coding., Main Outcomes and Measures: The difference between admission and 30-day MDS 3.0 Activities of Daily Living (ADL) scores., Results: A total of 20 495 patients (mean [SD] age, 78 [10.3] years; 78.9% White; and 97% male) were included in the analysis. Of the total sample, 882 patients (4.3%) had delirium on an SNF admission. The mean (SD) baseline ADL score on admission to SNF was significantly worse among patients with delirium than without (18.3 [4.7] vs 16.1 [5.2]; P < .001; d = 0.44.). On the 30-day repeated assessment, mean (SD) function (ADL scores) improved for both patients with delirium (0.6 [2.9]) and without delirium (1.8 [3.6]) (P < .001; d = -0.38). In the multivariate adjusted model, delirium was associated with statistically significant lower ADL improvement (difference in ADL score, -1.07; 95% CI, -1.31 to -0.83; P < .001)., Conclusions and Relevance: In this retrospective cohort study, patients with HF discharged to SNFs with delirium were less likely to show improvement in function compared with patients without delirium. Findings suggest a potential need to reexamine how and when health care professionals assess delirium in HF patients throughout their hospitalization and SNF course. Identifying and treating delirium for HF patients earlier in their care trajectory may play an important role in improving care and long-term functional outcomes in this population. Future research is warranted to further investigate the association between delirium and functional recovery for HF and other patient populations.