Background: Body composition strongly influences physical function in older adults. Bioelectrical impedance analysis (BIA) differentiates fat mass from skeletal muscle mass, and may be more useful than body mass index (BMI) for classifying women on their likelihood of physical function impairment. Aims: This study tested whether BIA-derived estimates of percentage body fat (%BF) and height-normalized skeletal muscle mass (skeletal muscle mass index; SMI) enhance classification of physical function impairment relative to BMI. Method: Black, White, Chinese, and Japanese midlife women (N = 1482) in the Study of Women’s Health Across the Nation (SWAN) completed performance-based measures of physical function. BMI (kg/m2) was calculated. %BF and SMI were derived through BIA. Receiver-operating characteristic (ROC) curve analysis, conducted in the overall sample and stratified by racial group, evaluated optimal cutpoints of BMI, %BF, and SMI for classifying women on moderate–severe physical function impairment. Results: In the overall sample, a BMI cutpoint of ≥ 30.1 kg/m2 correctly classified 71.1% of women on physical function impairment, and optimal cutpoints for %BF (≥ 43.4%) and SMI (≥ 8.1 kg/m2) correctly classified 69% and 62% of women, respectively. SMI did not meaningfully enhanced classification relative to BMI (change in area under the ROC curve = 0.002; net reclassification improvement = 0.021; integrated discrimination improvement = − 0.003). Optimal cutpoints for BMI, %BF, and SMI varied substantially across race. Among Black women, a %BF cutpoint of 43.9% performed somewhat better than BMI (change in area under the ROC curve = 0.017; sensitivity = 0.69, specificity = 0.64). Conclusion: Some race-specific BMI and %BF cutpoints have moderate utility for identifying impaired physical function among midlife women.