Objective: To assess the effect of SARS-CoV-2 infection on the health conditions and functional capacity of older adults living in long-term care units in Maceió City – Alagoas State. Methods: A prospective cohort was conducted with institutionalized older adults of both sexes. Older adults were assessed for clinical conditions (diagnosis of chronic diseases and biochemical tests), functional capacity, and nutritional status. All assessments were repeated on two occasions, maintaining a 6-month interval between them. Results: The sample was composed of 289 older adults. Of the total, 98 (33.9%) were positive for COVID-19 and eight died (2.8%). Men were more likely to have COVID-19 (OR = 3.50; p < 0.01). It was observed that the disease contributed to increasing the frequency of dependent older adults after six months (OR = 1.38; p-interaction < 0.01). It was also observed that after six months of positive diagnosis for COVID-19, there was greater weight loss (p < 0.01), reduced BMI (p < 0.01), increased mean SBP (p = 0.04), and DBP (p = 0.03). Conclusion: Effects of COVID-19 in institutionalized older adults go beyond acute complications and compromise blood pressure control, functional capacity, and favor weight loss.