We examined associations between positive emotion (PE) and functional status (Duke Activity Status Inventory) in 948 coronary artery disease (CAD) patients (35.1% women; age M = 70.1 years, SD = 6.3). Emotion and function measures were gathered during hospitalization and annually for 3 years. We used random coefficient models to examine PE during hospitalization and follow-up, as a predictor of change in function. Analyses adjusted for baseline functional status, negative emotion, social support, marital status, and disease severity. Sex was examined as a moderator of effects. PE assessed during hospitalization was a significant predictor of change in function such that lower levels of PE were associated with accelerated decline in function. Lower levels of PE during follow-up were also related to increasing decline in function but only in men. Thus, our findings indicate that PE is associated with less decline in functional status following hospitalization for CAD.