Objectives. Evidence suggests social relationships may be important facilitators for recovery from functional impairment, but the extant literature is limited in its measurement of social relationships including an over emphasis on filial social support and a paucity of nationally representative data. Methods. Using data from Waves 4-9 (1998-2008) of the Health and Retirement Study (HRS), this research examines the association between social relationships and recovery from severe mobility limitation (i.e., difficulty walking one block or across the room) among older Americans. Using a more nuanced measure of recovery that includes complete and partial recovery, a series of discrete-time event history models with multiple competing recovery outcomes were estimated using multinomial logistic regression. Results. Providing instrumental support to peers increased the odds of complete and partial recovery from severe mobility limitation, net of numerous social, and health factors. Having relatives living nearby decreased the odds of complete recovery, while being engaged in one's neighborhood increased the odds of partial recovery. The influence of partner status on partial and complete recovery varied by gender, whereby partnered men were more likely to experience recovery relative to partnered women. The effect of neighborhood engagement on partial recovery also varied by gender. Disengaged women were the least likely to experience partial recovery compared with any other group. Discussion. The rehabilitative potential of social relationships has important policy implications. Interventions aimed at encouraging older adults with mobility limitation to be engaged in their neighborhoods and/or provide instrumental support to peers may improve functional health outcomes.