Objective. Development of functional limitation is thought to be unrelated to changes in severity of radiographic osteoarthritis (OA) of the knee. We evaluated the relationship of change in radiographic OA to the incidence of severe functional limitation. Methods. Participants of the Multicenter Osteoarthritis Study, a cohort study of persons with or at high risk of knee OA, were evaluated at 0 and 30 months. Subjects were classified as having no, incident, stable, or worsening radiographic OA. Incidence of severe functional limitation was defined by Western Ontario and McMaster Universities Osteoarthritis Index (WOMAC) physical function scores (≥36.1/68) and walking speed (≤1.0 meter/second) at 30 months. The relationship of the change in radiographic OA to the incidence of severe functional limitation was evaluated by calculating risk ratios adjusted for potential confounders. Results. Of the 2,210 subjects included (mean age 62 years, mean body mass index 30 kg/m 2, 60% women), 53% had no, 6% had incident, 14% had stable, and 27% had worsening radiographic OA. Persons with incident radiographic OA had 1.9 and 1.8 times the risk by WOMAC physical function score and walking speed, respectively, to have incident severe functional limitation compared with those with no radiographic OA over 30 months. Compared with those with stable radiographic OA, persons with worsening radiographic OA had 2.2 and 2.3 times the risk of incident severe functional limitation, respectively. Conclusion. Changes in structural disease are associated with the development of severe functional limitations in persons with or even at high risk of knee OA. © 2010, American College of Rheumatology.