OBJECTIVES: To determine the association between vision and hearing impairment and subsequent cognitive and functional decline in community-residing older women. DESIGN: Prospective cohort study. SETTING: Four metropolitan areas of the United States. PARTICIPANTS: A total of 6,112 women aged 69 and older participating in the Study of Osteoporotic Fractures (SOF) between 1992 and 1994. MEASUREMENTS: Five thousand three hundred forty-five participants had hearing measured, 1,668 had visual acuity measured, and 1,636 had both measured. Visual impairment was defined as corrected vision worse than 20/40. Hearing impairment was defined as the inability to hear a tone of 40 dB or greater at 2,000 hertz. Participants completed the modified Mini-Mental State Examination and/or a functional status assessment at baseline and follow-up. Cognitive and functional decline were defined as the amount of decline from baseline to follow-up that exceeded the observed average change in scores by at least 1 standard deviation. RESULTS: About one-sixth (15.7%) of the sample had cognitive decline; 10.1% had functional decline. In multivariate models adjusted for sociodemographic characteristics and chronic conditions, vision impairment at baseline was associated with cognitive (odds ratio (OR) = 1.78, 95% confidence interval (CI) = 1.21-2.61) and functional (OR = 1.79, 95% CI = 1.15-2.79) decline. Hearing impairment was not associated with cognitive or functional decline. Combined impairment was associated with the greatest odds for cognitive (OR = 2.19, 95% CI = 1.26-3.81) and functional (OR = 1.87, 95% CI = 1.01-3.47) decline. CONCLUSION: Sensory impairment is associated with cognitive and functional decline in older women. Studies are needed to determine whether treatment of vision and hearing impairment can decrease the risk for cognitive and functional decline. © 2004 by the American Geriatrics Society.