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The aim of this study was to examine the role of comorbid conditions and body composition in the association between diabetes and subclinical functional limitation, an indication of early functional decline, in well-functioning older individuals.This was a cross-sectional analysis of 3,075 well-functioning black and white men and women aged 70-79 years, enrolled in the Health, Aging, and Body Composition study. Diabetes was defined by self-report and/or hypoglycemic medication use or fasting glucose ≥ 126 mg/dl. Subclinical functional limitation was defined using self-report of capacity and objective performance measures. Comorbid conditions were identified by self-reported diagnoses, medication use, and clinical measures. Body composition measures included anthropometry and total fat (dual X-ray absorptiometry).Of 2,926 participants, 1,252 (42.8%) had subclinical functional limitation at baseline. Among 2,370 individuals without diabetes, 40% had subclinical functional limitation, whereas the prevalence was 53% among the 556 diabetic participants with an age/sex/race-adjusted odds ratio (OR) 1.70 (95% CI 1.40-2.06). This association remained significant when adjusted for body composition measures (OR 1.54 [1.26-1.88]), diabetes-related comorbidities, and other potential confounders (OR 1.40 [1.14-1.73]). In the fully adjusted model, consideration of HbA1c (< or ≥7%) and diabetes duration showed that poor glycemic control in diabetic individuals explained the association with subclinical functional limitation.In a well-functioning older population, diabetes is associated with early indicators of functional decline, even after accounting for body composition and diabetes-related comorbidities. Poor glycemic control contributes to this relationship. Whether improvement in glycemic control in older people with diabetes would change this association should be tested.