This population-based longitudinal study, involving 2288 participants older than 65 years without dementia at baseline, investigated whether physical function was associated with incident dementia and Alzheimer disease (AD). Over the 6 years of follow-up, 319 participants developed dementia (221 had AD). The age-specific incidence rate of dementia was 53.1 per 1000 person-years for participants who scored 10 points or lower on the 16-point performance-based physical function test at baseline compared with 17.4 per 1000 person-years for those who scored higher than 10 points. A decrease in the baseline physical function test scores was associated with an increased risk for dementia, an increased risk for AD, and an increased rate of decline in cognitive function during the 6-year follow-up. The findings suggest that poor physical function may precede the onset of dementia and AD, and higher levels of physical function may be associated with a delayed onset.