Objective: Functional outcomes of transitional rehabilitation programs are often measured across multiple domains, including physical abilities, adjustment, and social participation. While research suggests clinician ratings on measures such as the Mayo-Portland Adaptability Index (MPAI-4) predict outcomes, the role of self-awareness in achieving rehabilitation outcomes is unclear. We explored how patients' self-awareness of deficits correspond to clinicians' ratings and whether level of self-awareness (as measured by the discrepancy between patient and staff MPAI-4 total score at discharge) predicts functional outcomes. Method: Clinicians completed the MPAI-4, a 29-item rating scale of functional impairment, at admission and discharge for 72 (mean age = 30.5) active duty service members and Veterans with acquired or traumatic brain injury who participated in a residential transitional rehabilitation program at the VA Palo Alto between 2008 and 2014. Patients also completed the MPAI-4 at the same time points. Results: Analyses revealed that following rehabilitation treatment, both patients and staff reported improved functional outcome on MPAI-4 total score from admission to discharge (t = 5.05, t = 11.16, p < .01, respectively). At admission, patients rated themselves as less impaired across all functional domains compared to the clinicians' ratings (p < .01). Poor self-awareness at admission was associated with poorer functional outcome at discharge (r = −.44, p < .01) and greater self-perceived functional changes at discharge (r = −.83, p < .00). Conclusion(s): Self-awareness of functional deficits may predict functional outcomes in a brain injury rehabilitation program. Moreover, impaired insight may serve to hinder functional gains and should be a focus for intervention in the rehabilitation setting.