Many patients exhibit persistently reduced pulmonary diffusing capacity after coronavirus disease 2019 (COVID-19). In this study, dual test gas diffusing capacity for carbon monoxide and nitric oxide (D_L,CO,NO) metrics and their relationship to disease severity and physical performance were examined in patients who previously had COVID-19. An initial cohort of 148 patients diagnosed with COVID-19 of all severities between March 2020 and March 2021 had a D_L,CO,NO measurement performed using the single-breath method at 5.7 months follow-up. All patients with at least one abnormal D_L,CO,NO metric (n = 87) were revaluated at 12.5 months follow-up. The D_L,CO,NO was used to provide the pulmonary diffusing capacity for nitric oxide (D_L,NO), the pulmonary diffusing capacity for carbon monoxide (D_L,CO,5s), the alveolar–capillary membrane diffusing capacity and the pulmonary capillary blood volume. At both 5.7 and 12.5 months, physical performance was assessed using a 30 s sit-to-stand test and the 6 min walk test. Approximately 60% of patients exhibited a severity-dependent decline in at least one D_L,CO,NO metric at 5.7 months follow-up. At 12.5 months, both D_L,NO and D_L,CO,5s had returned towards normal but still remained abnormal in two-thirds of the patients. Concurrently, improvements in physical performance were observed, but with no apparent relationship to any D_L,CO,NO metric. The severity-dependent decline in D_L,NO and D_L,CO observed at 5.7 months after COVID-19 appears to be reduced consistently at 12.5 months follow-up in the majority of patients, despite marked improvements in physical performance.