In chronic obstructive pulmonary disease (COPD), acute exacerbation of COPD requiring hospital admission is associated with mortality and healthcare costs. The ERICA study assessed multiple clinical measures in people with COPD, including the short physical performance battery (SPPB), a simple test of physical function with 3 components (gait speed, balance and sit-to-stand). We tested the hypothesis that SPPB score would relate to risk of hospital admissions and length of hospital stay. Data were analysed from 714 of the total 729 participants (434 men and 280 women) with COPD. Data from this prospective observational longitudinal study were obtained from 4 secondary and 1 tertiary centres from England, Scotland, and Wales. The main outcome measures were to estimate the risk of hospitalisation with acute exacerbation of COPD (AECOPD and length of hospital stay derived from hospital episode statistics (HES). In total, 291 of 714 individuals experienced 762 hospitalised AECOPD during five-year follow up. Poorer performance of SPPB was associated with both higher rate (IRR 1.08 per 1 point decrease, 95% CI 1.01 to 1.14) and increased length of stay (IRR 1.18 per 1 point decrease, 95% CI 1.10 to 1.27) for hospitalised AECOPD. For the individual sit-to-stand component of the SPPB, the association was even stronger (IRR 1.14, 95% CI 1.02 to 1.26 for rate and IRR 1.32, 95% CI 1.16 to 1.49 for length of stay for hospitalised AECOPD). The SPPB, and in particular the sit-to-stand component can both evaluate the risk of H-AECOPD and length of hospital stay in COPD. The SPPB can aid in clinical decision making and when prioritising healthcare resources.