In adults, light to moderate alcohol consumption is associated with lower risks for heart disease, diabetes, and mortality. This study examined whether light to moderate alcohol use is also associated with lower risk of incident physical disability over two 5-year periods in 4,276 noninstitutionalized adults in the United States, aged 50 years or older, by using data from 3 waves of the National Health and Nutrition Examination Survey Epidemiologic Follow-up Study surveys from 1982 to 1992. Light/moderate drinking (<15 drinks per week and <5 per drinking day or 4 per drinking day for women) was associated with reduced risk for incident disability or death over 5 years, compared with abstention (adjusted odds ratio = 0.77; P = 0.008). Among survivors, light/moderate drinking was associated with lower risk for incident disability, compared with abstention (adjusted odds ratio = 0.75; P = 0.009). In stratified analyses, disability risk decreased with light/moderate drinking in a dose-dependent fashion in men and women with good or better self-reported health but not in men or women with fair or worse self-reported health. Alcohol consumption in moderation might reduce the risk of developing physical disability in older adults in good health but not in those in poor health.