Using the Survey of Income and Program Participation, we document the importance of education in accounting for declines in functional limitations among older Americans from 1984 to 1993. Of the eight demographic and socioeconomic variables considered, education is most important in accounting for recent trends. The relationship between educational attainment and functioning has not changed measurably, but educational attainment has increased greatly during this period. Our analysis suggests, all else being equal, that future changes in education will continue to contribute to improvements in functioning, although at a reduced rate.