Objective: The objective of this study was to examine whether low levels of oestradiol and testosterone are associated with impaired mobility, low muscle strength and the incidence of falls in a population-based sample of older men and women. Design: Cross-sectional population-based study, based on data of the Longitudinal Ageing Study Amsterdam (LASA), including 623 men and 663 women, aged 65-88 years. Measurements: Serum levels of oestradiol, testosterone, albumin and sex hormone-binding globulin (SHBG) were measured. Physical performance, functional limitations and muscle strength were assessed, and a follow-up on falls was performed prospectively within 3 years. Results: After adjustment for age, level of education, alcohol use, physical activity, chronic disease and body mass index (BMI), men in the highest quartile of the oestradiol/SHBG ratio had significantly higher physical performance scores than men in the lowest quartile (β = 0.103). Serum levels of total testosterone were positively associated with muscle strength (β = 0.085). Calculated bioavailable testosterone levels were positively associated with physical performance and muscle strength (β = 0.128 and 0.109 respectively). No associations of oestradiol levels with mobility were seen in women. Levels of oestradiol and testosterone were not associated with falls. Conclusions: It can be concluded that low levels of sex hormones were associated with impaired mobility and low muscle strength in men, but not in women. Levels of sex hormones were not associated with the incidence of falls neither in men, nor in women.