Background: Kinesiophobia, defined as an excessive fear of movement due to pain or reinjury, has emerged as a significant psychological factor influencing recovery in musculoskeletal conditions. In fracture rehabilitation, where early mobilization is essential, fear-related avoidance behaviors may compromise functional outcomes despite adequate biological healing. Objective: To evaluate the role of kinesiophobia as a predictor of functional outcomes following fracture rehabilitation and to synthesize current evidence regarding its prevalence, mechanisms, and clinical implications. Methods: A narrative review was conducted using evidence from peer-reviewed literature indexed journals. Studies examining kinesiophobia in fracture populations, its association with functional outcomes, and related rehabilitation strategies were analyzed and synthesized. Results: Kinesiophobia is highly prevalent in fracture populations, affecting approximately 50–60% of patients. Evidence demonstrates a consistent negative association between kinesiophobia and functional outcomes, with reported correlation coefficients ranging from r = –0.40 to –0.77. Higher levels of fear are linked with reduced mobility, lower functional independence, and delayed recovery. Mechanistically, kinesiophobia contributes to avoidance behavior, altered motor patterns, reduced rehabilitation adherence, and physical deconditioning. Longitudinal findings suggest that early kinesiophobia may predict long-term functional limitations. Conclusion: Kinesiophobia is a significant and modifiable predictor of functional outcome following fracture rehabilitation. Integrating psychological assessment and targeted interventions such as graded exposure and cognitive-behavioral strategies into physiotherapy practice may enhance recovery and reduce disability. Further high-quality research is required to establish standardized protocols and optimize management approaches.