An increase in the number of older adults may raise the demand for health and care services, whereas decreasing prevalence of disability and functional limitations among them might counteract this demographic effect. However, the trends in health are inconsistent between studies and countries. In this article, we estimated the trends in mild disability and functional limitations among older Norwegians and analyzed whether they differ between socio-demographic groups. Data were obtained from repeated cross-sectional surveys conducted in 1987, 1991, 1995, 2002, 2005, and 2008, in total 4,036 non-institutionalized persons aged 67 years or older. We analyzed trends using multivariate logistic regression. On average, the age-adjusted trend in functional limitations was -3.3% per year, and in disability 3.4% per year. The risk for functional limitations or disability was elevated for women compared to men, for married compared to non-married, and was inversely associated with educational level The trends were significantly weaker with increasing age for disabilities, whereas none of the trends differed significantly between subgroups of sexes, educational level or marital status. Both functional limitations free and disability-free life expectancy appeared to have increased more than total life expectancy at age 67 during this period. The analysis suggests downward trends in the prevalence of mild disability and functional limitations among older Norwegians between 1987 and 2008 and a compression of lifetime in such health states. The reduced numbers of older people with disability and functional limitations may have restrained the demand for health and care services caused by the increase in the number of older adults.