Fifty-three elderly patients with intracapsular hip fracture were hospitalized in the Department of Orthopaedics. Forty-two underwent operations: 38 hemiarthroplasty; 2 total hip replacements and 2 closed reduction interior fixation. They were followed up and assessed prospectively five times for 6 months post-fracture. Cognition was evaluated by the Mini-Mental State Examination. Pre-fracture functioning was determined by the Functional Independence Measure (FIM) and the Katz index of activities of daily living (ADL). The functional outcome was assessed by the FIM gain defined as the difference between FIM scores at 6 months and just prior to discharge. FIM gain, length of stay, complications and mortality rates were not significantly different between three cognitive groups: normal, moderately and severely demented patients. The majority of patients were independent and partially dependent in their ADL. We conclude that dementia does not significantly affect' complications and functional gain in elderly patients operated on for intracapsular hip fracture if they were mobile before the fracture.