Aim Given that different hospitals achieve different outcomes, optimal evaluation of treatment outcomes in the local community requires evaluation of many institutions in that area. We carried out a prospective multicenter cohort study in Kagoshima Prefecture to identify factors that contribute to deterioration in activities of daily living performance and patient mortality 1 year after surgical treatment of hip fractures. Methods We prospectively enrolled 387 patients who underwent surgery for hip fractures in 33 registered facilities within a 6‐month period from February to July 2007. Logistic regression analysis was carried out to identify factors that contribute to deterioration in activities of daily living performance and death within 1 year after surgery. Results An increased risk of Barthel Index (BI) deterioration was associated with increased age (P for trend = 0.003), worse pre‐injury BI (P for trend = 0.021), trochanteric fractures (OR 2.07, 95% CI 1.31–3.27), worse BI at discharge (P for trend < 0.001) and postoperatively developed cognitive impairment (OR 6.34, 95% CI 2.15–18.7). The OR for BI deterioration in patients with newly‐diagnosed disease after discharge was approximately 9.16 (95% CI 4.03–20.8). No factors except age and sex were statistically significant as the preoperative indicators of mortality risk. Only BI at discharge was a significant determinant of mortality risk (P for trend = 0.013) after adjusting for the effects of age and sex. Conclusions Patients with poor activities of daily living performance at the time of hospital discharge were likely to show poor functional recovery and a high 1‐year postoperative mortality. Geriatr Gerontol Int 2017; 17: 391–401.