This study aimed to clarify the effects of worsening renal function (WRF) during hospitalization on activities of daily living (ADL) at discharge of elderly heart failure (HF) patients. We included 323 consecutive patients hospitalized for HF who were prescribed phase I cardiac rehabilitation (CR) from November 2017 to April 2019. WRF was defined as a relative increase from baseline in serum creatinine of 25% or that in serum creatinine ≥ 0.3 mg/dL during hospitalization. The indices of ADL and physical function were the functional independence measure (FIM), short physical performance battery (SPPB) and 10-m comfortable gait speed as assessed at discharge. We compared background factors, clinical parameters, walking level before hospitalization, physical function, and FIM in two groups. Multiple regression analysis was performed with FIM at discharge as the dependent variable and items with P < 0.05 in bivariate correlation as independent variables. Ultimately, 160 patients were included and divided into the WRF group (n = 72) and non-WRF group (n = 88). FIM, SPPB, and 10-m comfortable walking speed were significantly lower in the WRF group. Moreover, even after adjustment for confounding factors (age, Hb, eGFR, CKD, GNRI, start day of standing), eGFR on admission (β = 0.12), WRF (β =  − 6.42) and walking level before hospitalization (β = − 10.00) were independent factors of ADL decline at discharge (adjusted R² = 0.46). WRF during hospitalization of elderly HF patients was a factor affecting ADL decline at discharge along with walking level before hospitalization and renal function at admission.