Objective This study investigated the impact of glenohumeral subluxation on functional recovery in stroke patients, specifically focusing on limb function, activities of daily living (ADL), and balance. Methods A prospective cohort study was conducted with 34 first-time stroke patients who were within six months of their stroke onset. The participants were divided into an observation group with glenohumeral subluxation (n = 17) and a control group without subluxation (n = 17). Both groups received four weeks of routine rehabilitation therapy. Functional assessments included the Modified Barthel Index (MBI), the Berg Balance Scale (BBS), and the Fugl-Meyer assessment (FMA) for upper and lower limb motor function. Results Pre-intervention analysis showed no significant differences between the two groups in terms of sex ratio, age (p = 0.148), duration of illness (p = 0.519), affected side (p = 0.732), or type of stroke (p = 0.166). Post-treatment, both groups demonstrated significant improvements in all functional measures (p < 0.001). However, the control group exhibited better recovery in upper limb function as measured by the Fugl-Meyer Assessment (FMA) for the upper limb (p < 0.001), lower limb function (FMA lower limb) (p < 0.001), the MBI (p = 0.021), and the BBS (p = 0.002). Conclusion Glenohumeral subluxation significantly hinders the recovery of upper limb function in stroke patients and adversely affects the improvement of lower limb function, balance ability, and activities of daily living.