Many patients with head-and-neck cancer (HNC) suffer from speech or swallowing disorders. We investigated the impact of dysphagia on health-related quality of life (HRQOL), functioning, and distress in HNC survivors, and whether cancer rehabilitation can alleviate these conditions. Before admission (T0) and at discharge (T1) of three-week inpatient cancer rehabilitation, patient-reported outcomes were collected. HRQOL, symptoms, functioning, and psychological distress were assessed with EORTC QLQ-C30 and Hospital Anxiety and Depression Scale (HADS) questionnaires. Of 63 HNC patients, 22 had dysphagia, 23 needed no speech therapy (Control-1), and 18 needed speech therapy, but showed no symptoms of dysphagia (Control-2). Before rehabilitation, HRQOL, physical, social, and emotional functioning were significantly lower in dysphagia patients than in controls. Dysphagia patients reported more severe general symptoms including fatigue, pain, sleep disturbances, nausea/vomiting, diarrhea, and financial worries. Furthermore, the emotional and social functioning of Control-2 was significantly worse than Control-1. For all HNC patients, social, emotional, and role functioning, fatigue, nausea/vomiting, insomnia, and appetite loss significantly improved at T1. Improvements in HRQOL were most noticeable in dysphagia patients. Psychooncological counseling reduced depression in dysphagia and Control-2 patients to levels seen in the general population. In conclusion, dysphagia patients suffer severely from impaired functioning and systemic symptoms but benefit substantially from rehabilitation.