OBJECTIVES: To examine the association between anemia and disability, physical performance, and muscle strength in older persons. DESIGN: Cross-sectional. SETTING: Community-dwelling older persons in the Chianti area in Italy. PARTICIPANTS: A total of 1,156 persons aged 65 and older participating in the InChianti Study ("Invecchiare in Chianti," i.e., Aging in the Chianti Area). MEASUREMENTS: Anemia was defined according to World Health Organization criteria as a hemoglobin concentration below 12 g/dL in women and below 13 g/dL in men. Disability in six basic and eight instrumental activities of daily living was assessed. Physical performance was assessed using the short physical performance battery (4-m walk, balance, and chair stands), which yields a summary performance score ranging from 0 to 12 (high). Muscle strength was determined using knee extensor and handgrip strength assessments. RESULTS: Overall, 11.1% of the men and 11.5% of the women had anemia. After adjustment for age, sex, body mass index, Mini-Mental State Examination score, creatinine level, and presence of various comorbid conditions, anemic persons had more disabilities (1.71 vs 1.04, P=.002) and poorer performance (8.8 vs 9.6, P=.003) than persons without anemia. Anemic persons also had significantly lower knee extensor strength (14.1 vs 15.2 kg, P=.02) and lower handgrip strength (25.3 vs 27.1 kg, P =.04) than persons without anemia. Further adjustment for inflammatory markers (interleukin-6, C-reactive protein, tumor necrosis factor-α) did not change these associations. CONCLUSION: Anemia is associated with disability, poorer physical performance, and lower muscle strength. Further research should explore whether treating anemia has a beneficial effect on the functional status of older persons.