The study analyzes the characteristics of 54 nursing home patients (12 male, 42 female; mean age 81.9 ± 7.9 years) with and without the complaint of the fear of falling, and the association of this fear with falling and functional status. Patients who had a fear of falling at baseline (n = 25) had a lower functional status (Barthel Index) score (69.8 ± 22.3 vs. 79.3 ± 15.4), lower scores for balance (8.4 ± 4.4 vs. 10.6 ± 3.7) and gait (Tinetti; 6.7 ± 3.3 vs. 8.3 ± 2.6) and were taking a higher number of psychotropic drugs (0.8 ± 1.1 vs. 0.2 ± 0.5) than those with no fear (n = 29). At 24 months’ follow-up, 25 subjects were still available for evaluation. Fear of falling at baseline was predictive of a decline in activities of daily living, as measured by the Barthel Index, in a multiple regression model, after controlling for baseline cognitive function and change in cognitive function, age, gender, balance and gait, frequency of psychotropic drug usage, and number of chronic symptoms. The findings of this study suggests that, in mobile patients, the fear of falling can be a clinically important predictor of functional decline.