OBJECTIVE: To estimate the prevalence of physical disability associated with diabetes among U.S. adults > or =60 years of age. RESEARCH DESIGN AND METHODS: We analyzed data from a nationally representative sample of 6,588 community-dwelling men and women > or =60 years of age who participated in the Third National Health and Nutrition Examination Survey. Diabetes and comorbidities (coronary heart disease, intermittent claudication, stroke, arthritis, and visual impairment) were assessed by questionnaire. Physical disability was assessed by self-reported ability to walk one-fourth of a mile, climb 10 steps, and do housework. Walking speed, lower-extremity function, and balance were assessed using physical performance tests. RESULTS: Among subjects > or =60 years of age with diabetes, 32% of women and 15% of men reported an inability to walk one-fourth of a mile, climb stairs, or do housework compared with 14% of women and 8% of men without diabetes. Diabetes was associated with a 2- to 3-fold increased odds of not being able to do each task among both men and women and up to a 3.6-fold increased risk of not being able to do all 3 tasks. Among women, diabetes was also associated with slower walking speed, inferior lower-extremity function, decreased balance, and an increased risk of falling. Of the >5 million U.S. adults > or =60 years of age with diabetes, 1.2 million are unable to do major physical tasks. CONCLUSIONS: Diabetes is associated with a major burden of physical disability in older U.S. adults, and these disabilities are likely to substantially impair their quality of life.