Abstract Background Drugs with anticholinergic effects are associated with adverse events such as delirium and falls as well as cognitive decline and loss of independence. Objective The aim of the study was to evaluate the association between anticholinergic burden and both cognitive and functional status, according to the hypothesis that the cumulative anticholinergic burden, as measured by the Anticholinergic Cognitive Burden (ACB) Scale and Anticholinergic Risk Scale (ARS), increases the risk of cognitive decline and impairs activities of daily living. Methods This cross-sectional, prospective study (3-month telephone follow-up) was conducted in 66 Italian internal medicine and geriatric wards participating in the Registry of Polytherapies SIMI (Societa` Italiana di Medicina Interna) (REPOSI) study during 2010. The sample included 1,380 inpatients aged 65 years or older. Cognitive status was rated with the Short Blessed Test (SBT) and physical function with the Barthel Index. Each patient’s anticholinergic burden was evaluated using the ACB and ARS scores. Results The mean SBT score for patients treated with anticholinergic drugs was higher than that for patients receiving no anticholinergic medications as also indicated by the ACB scale, even after adjustment for age, sex, education, stroke and transient ischaemic attack [9.2 (95 % CI 8.6–9.9) vs. 8.5 (95 % CI 7.8–9.2); p = 0.05]. There was a dose–response relationship between total ACB score and cognitive impairment. Patients identified by the ARS had more severe cognitive and physical impairment than patients identified by the ACB scale, and the dose–response relationship between this score and ability to perform activities of daily living was clear. No correlation was found with length of hospital stay. Conclusions Drugs with anticholinergic properties identified by the ACB scale and ARS are associated with worse cognitive and functional performance in elderly patients. The ACB scale might permit a rapid identification of drugs potentially associated with cognitive impairment in a dose–response pattern, but the ARS is better at rating activities of daily living.