BACKGROUND AND PURPOSE: The greater mortality and residual physical impairments among black stroke patients may be attributable to differential utilization of rehabilitation services. This report examines, within an equal-access healthcare system, racial differences in time to initiation of stroke rehabilitation services and in the trajectory of physical function recovery. METHODS: This study was a secondary analysis of data from an inception cohort of 1073 stroke patients hospitalized between April 1995 and March 1997 and followed up for up to 1 year. Inpatient data came from medical record reviews; follow-up data came from telephone interviews at 1, 6, and 12 months after stroke. The study included consecutive acute ischemic or intracerebral hemorrhagic stroke patients from 9 VA medical centers. The main outcome measures were time to initiation of inpatient rehabilitation services and ability to perform activities of daily living. RESULTS: There were no racial differences in receipt of inpatient rehabilitation services (blacks, 76%; whites, 70%) or in the proportion of patients referred within 3 days of admission (blacks, 43.5%; whites, 42.0%). Among patients who experienced delay in initiation of rehabilitation, only low-income blacks experienced worse functional recovery over 12 months. CONCLUSIONS: Low-income black stroke patients who experience delay in initiation of inpatient rehabilitation have a worse trajectory of functional recovery in the first year after stroke. Poverty-associated factors in the postdischarge setting may explain this phenomenon.