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Early identification of physical impairment related to Alzheimer disease (AD) is increasingly identified as an important aspect of diagnosis and care. Clinically accessible tools for evaluating physical capacity and impairment in AD have been developed but require further characterization for their effective use.To assess the utility of the Physical Performance Test (PPT) for identifying functionally limiting aerobic capacity in older adults with AD and without dementia.Secondary analysis of a dataset of community dwelling older adults, 70 without dementia and 60 with early-stage AD. Participants were administered the PPT and performed a graded maximal exercise test. The clinical utility of 2 versions of the PPT was described by determining sensitivity and specificity to functionally limiting aerobic capacity.The 9-item PPT is predictive of diminished aerobic capacity in older adults with AD. A score of 28 or less indicates likelihood of functionally limiting aerobic capacity that would limit independent function with 67% sensitivity and 67% specificity. The 4-item mini-PPT demonstrates improved capability for identifying impaired functional aerobic capacity with 85% sensitivity and 62% specificity. The PPT was not useful for identifying impaired functional aerobic capacity in older adults without dementia.The PPT, which incorporates basic and instrumental activities of daily living as test items, and the mini-PPT which focuses on basic activities of daily living and simple physical functions, are both clinically useful tool for the evaluation for individuals in the earliest stages of AD and both provide important information about functional performance. The mini-PPT additionally inform the clinician as to whether or not individual with early-stage AD is likely to have insufficient aerobic capacity to perform instrumental daily functions.