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Objective: To examine how health self-efficacy and cognitive impairment severity relate to functional independence after acquired brain injury (ABI). Design: Observational. Setting: Outpatient rehabilitation hospital. Participants: Seventy-five adults with predominately stroke or traumatic brain injury who were beginning a course of occupational therapy. Main Measures: Health self-efficacy was assessed with the Self-Rated Abilities for Health Practices. Cognitive functioning was assessed via a composite z score of neuropsychological tests. Trait affectivity was assessed with the Positive and Negative Affect Schedule. Functional independence was assessed with the Barthel Index and Lawton Instrumental Activities of Daily Living Scale. Results: Health self-efficacy correlated moderately with functional independence. A moderation threshold effect was detected that revealed for whom health self-efficacy predicted functional independence. Among participants with normal to mildly impaired cognition (>−2 z cognitive composite), health self-efficacy correlated positively with functional independence, which held after accounting for trait affectivity. In contrast, health self-efficacy was not correlated with functional independence among participants with greater impairment (<−2 z cognitive composite). Conclusions: Health self-efficacy predicts functional independence and may serve as a protective factor after ABI among individuals with relatively intact cognition. However, health self-efficacy does not predict functional independence among individuals with moderate or severe cognitive impairment, possibly due to limited self-awareness. This study extends the literature linking health self-efficacy with rehabilitation outcomes and reinforces the need for promoting self-management in ABI.