Years lived with and without physical impairment are central measures of public health. We sought to determine whether these measures differed between rural and urban residents who were impaired at the time of a baseline measurement. We examined 16 subgroups defined by rural/urban residence, gender, race, and education. This is a 20-year retrospective cohort study, following 2,939 Americans who were aged 65-69 in 1982 and physically impaired at the time of the baseline measurement, with data from the National Long-Term Care Survey. Interpolated Markov chain analysis and microsimulation estimated life expectancy at age 65 and expected number of years with physical impairment. Impairment was defined as requiring help in 1 or more activities of daily living. Among older individuals with physical impairments at baseline, rural residents lived notably longer than urban residents. In all but 1 group, rural residents lived more years with physical impairment, and they also had a notably larger proportion of remaining life impaired. Results suggest a notable public health impact of rural residence for impaired individuals, a longer expected period of impairment. Needs for services for people with impairments may be greater in rural areas.