BACKGROUND: Functional limitations are a major cause for needing care and institutionalization among older adults. Exposure to air pollution has been suggested to be associated with increased functional limitations in older people. OBJECTIVE: Our objective was to assess the association between air pollution and physical functioning in Dutch older adults. METHODS: We analyzed data on performance-based (walking speed, ability to rise from a chair, putting on and taking off a cardigan, balance test) and self-reported physical functioning for 1,762 participants of the Longitudinal Aging Study Amsterdam, who participated in measurement cycles performed in 2005/2006, 2008/2009, and 2011/2012. Annual average outdoor air pollution concentrations [nitrogen dioxide (NO2), nitrogen oxides (NOx), particulate matter with diameters ≤2.5μm (PM2.5), ≤10μm (PM10), and 2.5-10μm (PMcoarse), and PM2.5 absorbance] at the home address at the start of the first measurement cycle were estimated using land-use regression models. Analyses were performed using mixed models with random participant intercepts adjusting for potential confounders. RESULTS: Exposure to most air pollutants was associated with reduced performance-based physical functioning; for example, an interquartile range increase in NO2 exposure was associated with a 0.22 (95% confidence interval: 0.03, 0.42) lower performance test score in fully adjusted models, equivalent to the difference in performance score between participants who differed by 9 mo in age. Exposure to air pollution was generally not statistically significantly associated with self-reported functional limitations, and not associated with a faster decline in performance-based physical functioning over the study period. CONCLUSION: This study suggests that exposure to air pollution may adversely affect physical performance of older adults in the Netherlands. https://doi.org/10.1289/EHP2239.