Purpose The aim was to compare active heel-slide exercise (AHSE) + standard physiotherapy (PT) to continuous passive motion (CPM) + standard PT during inpatient rehabilitation of total knee arthroplasty (TKA) patients in terms of postoperative outcomes. Methods Patients were randomly assigned into AHSE or CPM groups. Both groups received standard PT (range of motion and strengthening exercises, and ambulation) during hospital stay. Patients were evaluated regarding functional outcomes, knee proprioception, pain intensity, active range of motion, knee circumference, length of hospital stay, time for achieving straight leg raise actively, time for achieving 70 degrees knee flexion. Results Groups were similar at baseline (n.s.). At discharge, AHSE group was better in terms of pain intensity (p < 0.001), Hospital for Special Surgery knee score (p = 0.001), rise from sitting (p = 0.015), ascend/descend stairs (p = 0.038), and timed up and go test (p = 0.028) compared to CPM group. AHSE group was able to perform the straight leg raise earlier than CPM group during inpatient period (p = 0.001) and demonstrated improved proprioception at discharge and at 3-month follow-up (p < 0.05). No statistical differences were detected between groups in other evaluation parameters (n.s.). Conclusion Our findings support AHSE therapy offers a more functional rehabilitation and leads beneficial results for patients following TKA. Therefore, active exercise approach encouraging patients to participate in their rehabilitation should be first choice in acute postoperative rehabilitation following TKA rather than CPM.