The objectives of this study were to ascertain the prevalence of the number and severity of vertebral deformities in elderly people and determine the extent to which these are associated with several aspects of functioning. The study was conducted in a subsample of the Longitudinal Aging Study Amsterdam (LASA) consisting of 527 participants (260 men and 267 women), aged 65 years or over. Lateral radiographs of the spine (T4-L5) were made of each participant and a semiquantitative method was used to assess the number and degree of vertebral deformities. The prevalence of having at least one vertebral deformity was 39% in both men and women. Six percent of the men and 5% of the women had at least three vertebral deformities. For severe deformities, the prevalence was 8% in men and 12% in women. The number of vertebral deformities was significantly associated with a height loss of more than 5 cm, difficulties in activities of daily living, poor performance, more than 3 days in bed and more than 3 days with limited activities because of health problems in the past month, and poor self-perceived health. For most of these outcome measures, associations were strongest when three or more deformities were present. The presence of a severe deformity was associated with a height loss of more than 5 cm, poor performance, more than 3 days with limited activities in the past month, and poor self-perceived health. None of the associations between number and severity of vertebral deformities and the level of functioning was modified by sex. We can conclude that vertebral deformities are very common in both older men and older women and that vertebral deformities, even if they are not clinically manifest, have a substantial impact on the level of functioning and well-being of older people.