We assessed the relative association of quadriceps muscle strength and power as well as optimal shortening velocity (υopt) to physical functioning in 28 women aged 50–87 years with chronic osteoarthritis participating in a three-week multimodal exercise program. Quadriceps muscle strength, power, υopt, and functional performance using the Activities of Daily Living (ADL) scale, Timed Up & Go (TUG) test, Tinetti test, and 6-Minute Walking Test (6-MWT) were assessed pre- and postrehabilitation. With rehabilitation, patients improved the values of strength, power, and the results of all functional tests. Both at baseline and postrehabilitation, functional status was more strongly related to power and υopt than to strength. Functional gains obtained with rehabilitation were not related to changes in power or υopt, and only very modestly related to changes in strength. Future studies should assess the benefits and feasibility of power- and velocity-oriented training in patients with osteoarthritis.