Studies have shown that some elderly persons who suffer decline in activities of daily living (ADL) functioning experience an improvement. This phenomenon has been examined mainly among elderly persons in the community using summary ADL indices. This article examines functional improvement among 2,527 residents of institutions for semi-independent and frail elders in Israel in four specific ADLs--bathing, eating, bladder continence, and mobility--at two points in time, 2 to 4 years apart. Demographic, functional, and institutional variables were used to predict functional improvement through logistic regression. The variables were found to differentially affect each ADL, highlighting two opposite aspects of institutionalization--deterioration, on the one hand, and rehabilitation through intervention by highly trained staff, on the other.