Background. There is limited evidence supporting the hypothesized environment-disability link. The objectives of this study were to (a) identify the prevalence of community mobility barriers and transportation facilitators and (b) examine whether barriers and facilitators were associated with disability among older adults with functional limitations. Methods Four hundred and thirty-five participants aged 65+ years old with functional limitations were recruited from the Multicenter Osteoarthritis Study, a prospective study of community-dwelling adults with or at risk of developing symptomatic knee osteoarthritis. Presence of community barriers and facilitators was ascertained by the Home and Community Environment survey. Two domains of disability, (a) daily activity limitation (DAL) and (b) daily activity frequency (DAF), were assessed with the Late-Life Disability Instrument. Covariates included age, gender, education, race, comorbidity, body mass index, knee pain, and functional limitation. Multivariable logistic regression was used to examine adjusted associations of community factors with presence of DAL and DAF. Results Approximately one third of the participants lived in a community with high mobility barriers and low transportation facilitators. High mobility barriers was associated with greater odds of DAL (odds ratio [OR] = 2.0, 95% confidence interval [CI] 1.2-3.1) after adjusting for covariates, and high transportation facilitators was associated with lower odds of DAL (OR = 0.5, 95% CI 0.3-0.8) but not with DAF in adjusted models. Conclusion People with functional limitations who live in communities that were more restrictive felt more limited in doing daily activities but did not perform these daily activities any less frequently. © The Author 2009. Published by Oxford University Press on behalf of The Gerontological Society of America. All rights reserved.