Background There is still controversy about the relationship between aging and changes in functional ability. This study aims to describe the level of basic activities of daily living (ADL) and higher-level instrumental activities of daily living (IADL) in different age groups and explore the factors associated with functional disability in Chinese older inpatients. Methods This cross-sectional study surveyed 9996 older inpatients aged 65 years and older from six tertiary hospitals in China from October 2018 to February 2019. The levels of ADL and IADL were measured by scores of the Barthel index and Instrumental Activities of Daily Living Scale. A mixed-effect generalized linear model was used to examine the association between functional disability and covariates. Results The average ADL score was 89.51 +/- 19.29 and the mean IADL score 6.76 +/- 2.01 for all participants. There was a trend of decreasing scores along with aging, and significant differences between age groups were also observed (P < 0.001). The most affected ADL and IADL was stair climbing and shopping, respectively. Sociodemographic characteristics (such as age), physical health variables (frailty, emaciation, hearing dysfunction, urinary dysfunction, defecation dysfunction, falling accidents in the past 12 months), and mental health variables (cognitive dysfunction, depression) were associated with functional disability. Patients from the emergency department or transferred from other hospitals and former alcohol drinkers are at risk of ADL disability. Former smoking is a risk factor for IADL disability, whereas current drinking, higher-level education, and residing in a building without elevators were likely to maintain a better IADL performance. Conclusions Functional ability declines with aging, older inpatients are low dependency upon ADL and IADL. There are several associated factors among the participants derived from this investigation of a large-scale, multicenter, nationally representative Chinese older inpatient population. These findings potentially have major importance for the planning of hospital services, discharge planning, and post-discharge care.