The effect of smoking and physical activity on active and disabled life expectancy was estimated using data from the Established Populations for Epidemiologic Studies of the Elderly (EPESE). Population-based samples of persons aged >65 years from the East Boston, Massachusetts, New Haven, Connecticut, and Iowa sites of the EPESE were assessed at baseline between 1981 and 1983 and followed for mortality and disability over six annual follow-ups. A total of 8,604 persons without disability at baseline were classified as “ever” or “never” smokers and doing “low,” “moderate,” or “high” level physical activity. Active and disabled life expectancies were estimated using a Markov chain model. Compared with smokers, men and women nonsmokers survived 1.6–3.9 and 1.6–3.6 years longer, respectively, depending on level of physical activity. When smokers were disabled and close to death, most nonsmokers were still nondisabled. Physical activity, from low to moderate to high, was significantly associated with more years of life expectancy in both smokers (9.5, 10.5, 12.9 years in men and 11.1,12.6,15.3 years in women at age 65) and nonsmokers (11.0, 14.4,16.2 years in men and 12.7,16.2,18.4 years in women at age 65). Higher physical activity was associated with fewer years of disability prior to death. These findings provide strong and explicit evidence that refraining from smoking and doing regular physical activity predict a long and healthy life. Am J Epidemiol 1999; 149:645–53.