To assess the associations between incident atrial fibrillation (AF) and disability-free survival and risk of disability. Prospective cohort study. Cardiovascular Health Study. Individuals aged 65 and older and enrolled in fee-for-service Medicare followed between 1991 and 2009 (MN = 4,046). Individuals with prevalent AF, activity of daily living (ADL) disability, or a history of stroke or heart failure at baseline were excluded. Incident AF was identified according to annual study electrocardiogram, hospital discharge diagnosis, or Medicare claims. Disability-free survival was defined as survival free of ADL disability (any difficulty or inability in bathing, dressing, eating, using the toilet, walking around the home, or getting out of a bed or chair). ADLs were assessed at annual study visits or in a telephone interview. Association between incident AF and disability-free survival or risk of disability was estimated using Cox proportional hazards models. Over an average of 7.0 years of follow-up, 660 individuals (16.3%) developed incident AF, and 3,112 (77%) became disabled or died. Incident AF was associated with shorter disability-free survival (hazard ratio (HR) for death or ADL disability = 1.71, 95% confidence interval (CI) = 1.55-1.90) and a higher risk of ADL disability (HR = 1.36, 95% CI = 1.18-1.58) than in individuals with no history of AF. This association persisted after adjustment for interim stroke and heart failure. These results suggest that AF is a risk factor for shorter functional longevity in older adults, independent of other risk factors and comorbid conditions.