The rise in number and proportion of older people, and the functional disability that is associated with increasing age, generate concern regarding the societal consequences of a large number of disabled elderly persons. Therefore, measuring disability in terms of activities of daily living has become routine in surveys of older people in most studies on ageing. Despite methodological obstacles, research into functional ability in the elderly has progressed during the past few decades. A high prevalence of functional disability in the elderly is consistently reported, although considerable variation has been found among studies. In contrast to functionally independent elderly, disabled elderly have been found to make increased use of home help services, and have higher institutionalization rates and premature mortality. Factors that are consistently reported as being associated with increased functional disability are older age, female sex, lower educational level, lack of exercise, chronic disease and impaired cognition. Among the chronic diseases, dementia is a progressive and disabling condition that accounts for a large proportion of the disability in elderly populations. A combination of various strategies must be employed in the approach to reduction of disability in the elderly population. More research is needed to gain a better understanding of risk and protective factors, so that we will be able to detect persons at early stages of disability, and to plan for services or rehabilitation for severely disabled persons.