Functional dysphagia therapy (FDT) is a noninvasive procedure that can accompany percutaneous endoscopic gastrostomy (PEG) treatment and supports transitioning from tube to oral feeding. In this retrospective study, we investigated the outcome of FDT with or without PEG feeding. Patients with dysphagia were divided into two groups: those with PEG feeding (N = 117) and those with exclusively oral feeding (N = 105). Both groups received functional training (oral motor skills/sensation, compensatory swallowing techniques) from speech-language therapists. Functional oral intake, weight, Barthel index, and speech and language abilities were evaluated pre- and post-training. The non-PEG group showed a significant post-treatment improvement in functional oral intake, with diet improvement from pasty consistency to firm meals in most cases. However, even severely disordered patients (with PEG feeding) showed a significant increase in functional oral intake, still requiring PEG feeding post-treatment but able to take some food orally. The sooner a PEG was placed, the more functional oral intake improved. Significantly more complications and higher mortality occurred in the PEG group compared to the group with exclusively oral feeding. Dysphagia treatment in the elderly requires a multiprofessional setting, differentiated assessment, and functional training of oral motor skills and sensation and swallowing techniques.