Background: Older adults after hip fracture are at increased risk of being prescribed potentially inappropriate medications, and may be particularly vulnerable to their adverse effects. Objective: The objective of this study was to examine the association of potentially inappropriate medication use with the time to full functional recovery within 1 year of hip fracture repair. Methods: We conducted a secondary analysis of a prospective longitudinal study of eight hospitals in St. Louis, MO, USA. The participants were older adults (n = 477) aged 60 years or older who had undergone surgical repair of a hip fracture free of delirium, dementia or depression at baseline. Drugs at baseline were categorised using the American Geriatrics Society 2012 Beers criteria. The outcome was the Functional Recovery Scale total score measured at four time points during a 12-month period of observation. Cox proportional hazards models examined the time to 95% recovery of function (‘full recovery’), adjusting for demographics, cognition, depression, medical co-morbidity, pre-fracture functioning and pain as covariates. Results: Potentially inappropriate medication use was common following hip fracture, with 51% of participants prescribed at least one potentially inappropriate medication and 17.4% prescribed two or more potentially inappropriate medications. Potentially inappropriate medication use was significantly associated with a longer time to achieve full recovery with a hazard ratio of 0.69 (95% confidence interval 0.52–0.92; p = 0.012) and this association was stronger for two or more potentially inappropriate medications compared with one potentially inappropriate medication (hazard ratio = 0.60; 95% confidence interval 0.40–0.90; p = 0.014). Conclusion: Potentially inappropriate medication use was associated with a longer time to full functional recovery in older adults who underwent surgery for a hip fracture, particularly in those using two or more potentially inappropriate medications at baseline.