Decline in cognitive functioning and onset of cognitive impairment are potentially important predictors of elderly persons needing informal assistance and formal health care. This article describes the measures of cognitive functioning that were developed for the Asset and Health Dynamics Among the Oldest Old (AHEAD) study of some 6,500 Americans aged 70 years and older. The study was designed to investigate the impact of health on disbursement of family and economic resources. Evaluation of the cognitive measures in terms of psychometric properties and missing data, telephone administration, and formation of an aggregate index is encouraging. Their construct validity is evidenced by their correlations with sociodemographic characteristics and health indicators that replicate existing findings as well as by their prediction of IADL and ADL functioning that are consistent with theory.