Objectives: To examine racial differences in the use of rehabilitation services and functional improvement during receipt of services. Design: Secondary analysis of the 2016 National Health and Aging Trends Study (NHATS). Setting: Standardized in-person home interviews. Participants: Community-dwelling Medicare enrollees (N = 6,309), 1,276 of whom reported receiving rehabilitation services in the previous 12 months. Measurements: Self-reported use of rehabilitation services, setting (inpatient, outpatient, home based), reason for use, and perceptions of change in functioning after receiving services. Results: Controlling for sex, dual eligibility for Medicaid, age, number of chronic conditions, functional mobility at the prior round, income, and geographic region, the odds of receiving rehabilitation services in any setting was 1.38 times as great in whites as in blacks (95% confidence interval = 1.09–1.75). Of those receiving therapy, whites were more likely to receive home-based and inpatient rehabilitation services, but there were no racial differences in improvement in function. Conclusion: Strategies are needed to identify possible barriers to use of rehabilitation services for vulnerable groups of aging individuals who need rehabilitation services, particularly older blacks.