Introduction: Fractures around the hip in the geriatric population not only lead to functional but also psychological impairment. Psychiatric disturbances can be associated with poor participation in rehabilitation, increased risk of falling again, and higher rates of mortality. The present study was undertaken to assess the association between the psychological status and functional outcome of surgically managed elderly Indian patients who had sustained fractures around the hip. Materials and methods: The present study was a hospital based prospective, single centre study. One hundred and two geriatric patients who had sustained hip fracture and had been managed surgically, having no cognitive dysfunction, living independently, having unhindered walking capability before the fracture, were included in the study. They were called for follow-up at 3rd, 6th, and 12th month after the hip surgery. Psychological assessment was done by the Hospital Anxiety and Depression Scale (HADS) and functional outcome by using the Harris hip score (HHS). Results: Our study did not show association between psychological status and functional outcome except in one sub-group. Significant correlation was observed between the psychological status and functional outcome in most of the patients in the extra-capsular group. We have identified improvement in the depression, anxiety and functional scores during the follow-up. Conclusion: We conclude that psychiatric disturbances in a geriatric patient after undergoing a surgery for hip fracture may lead to poor recovery. We recommend that all such geriatric patients should undergo a psychological assessment and proper therapy should be instituted to achieve good functional recovery