This study examined whether cognitive impairment, falls, and urinary incontinence (UI) were independent predictors of functional decline using a 2-year observation of a non-disabled older Japanese cohort living in a community from 1999 to 2001. A total of 139 men and 214 women aged 70-94 years at the baseline who were independent in both activities of daily living (ADL) and instrumental activities of daily living (IADL) were analyzed in this study. Independent variables, such as cognitive impairment, falls, UI, and other possible factors associated with functional decline were obtained from an interview survey at the baseline. A dependent variable was functional status in ADL and IADL obtained at the time of the 2-year follow-up. During the 2-year follow-up, cognitive function was a significant predictor for both IADL dependence and ADL and/or IADL dependence. Using a group of subjects with Mini Mental State Examination (MMSE) scores of 30-27 points as a reference group, a significant correlation was identified between lower MMSE scores and an increased odds ratio for functional decline. Lower cognitive function was a significant predictor of functional decline, even among those older Japanese whose cognitive function was deemed to be within the normal range.