OBJECTIVES: To evaluate whether patients with hip fracture with high positive affect had better functioning than those with low positive affect or depressive symptoms in three performance‐based measures over 2 years after the fracture. DESIGN: Longitudinal study with assessments at baseline and 2, 6, 12, 18, and 24 months posthospitalization. SETTING: Community. PARTICIPANTS: Four hundred thirty‐two patients, aged 65 and older, hospitalized for hip fracture in Baltimore, Maryland, between 1990 and 1991. MEASUREMENTS: High and low positive affect and depressive symptoms were based on baseline Center for Epidemiologic Studies Depression Scale score, usual and rapid walking speed, one chair stand, demographic factors, comorbidities, and history of cognitive impairment. RESULTS: At each follow‐up point, respondents with high positive affect at baseline (36% of sample) had faster walking and chair stand speeds than those with low positive affect (13%) and depressive symptoms (51%). For example, at 6 months, the mean usual walking pace was 0.4 m/s (standard error (SE)=0.02) for respondents with high positive affect, versus 0.4 m/s (SE=0.03) and 0.35 m/s (SE=0.02) for patients with low positive affect and depressive symptoms, respectively; adjusted differences were 0.02 (95% confidence interval (CI)=−0.06–0.09) and 0.06 (95% CI=0.01–0.11). Respondents with high positive affect appeared to achieve their maximum improvement in usual pace approximately 6 months before other respondents, but this interaction was not statistically significant. Respondents with consistently high positive affect had the best functioning over the follow‐up period. CONCLUSION: High positive affect seems to have a beneficial influence on performance‐based functioning after hip fracture.