Background: Hospitalized patients with cancer often have impaired function, as measured by activities of daily living (ADLs), related to age, comorbidities, and both cancer and treatment-related morbidity. However, the relationship between functional impairment and patients’ symptom burden and clinical outcomes has not been well described. Methods: We prospectively enrolled patients with advanced cancer with unplanned hospitalizations at an academic medical center. Upon admission, nurses assessed patients’ ADLs (mobility, feeding, bathing, dressing, and grooming). We used the Edmonton Symptom Assessment Scale (ESAS) and Patient Health Questionnaire-4 to assess physical and psychological symptoms, comparing symptom burden between patients with and without ADL impairment. We used regression models adjusted for age, sex, education, Charlson comorbidity index, months since advanced cancer diagnosis, and cancer type to assess the relationship between any ADL impairment on admission and hospital length of stay, the composite outcome of death or readmission within 90 days of discharge, and survival. Results: Among 932 patients, 40.2% had at least one ADL impairment. Patients with ADL impairment were older (Mean = 67.2 vs 60.8 years, p < 0.001), had higher Charlson comorbidity index (Mean = 1.1 vs 0.7, p < 0.001), and higher physical symptom burden (ESAS Physical Mean = 35.2 vs 30.9, p < 0.001). Those with ADL impairment were more likely to have moderate to severe constipation (46.7% vs. 36.0%, p < 0.01), pain (74.9% vs. 63.1%, p < 0.01), drowsiness (76.6% vs. 68.3%, p < 0.01), as well as symptoms of depression (38.3% vs. 23.6%, p < 0.01) and anxiety (35.9% vs. 22.4%, p < 0.01). In adjusted models, ADL impairment was associated with longer hospital length of stay (B = 1.30, p < 0.01), higher odds of death or readmission within 90 days (odds ratio = 2.26, p < 0.01), and higher mortality (hazard ratio = 1.73, p < 0.01). Conclusions: Hospitalized patients with advanced cancer who have functional impairment experience a significantly higher symptom burden and worse health outcomes compared to those without functional impairment. These findings highlight the need to assess and address functional impairment among this population to enhance their quality of life and care.