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Instrumental activities of daily living (IADLs) are tasks that are necessary for independent community living. These tasks often require intact physical and cognitive function, the impairment of which may adversely affect health in older adults. In the current study, we examined the association between IADL impairment and incident heart failure (HF) in community-dwelling older adults.Of the 5795 community-dwelling adults, aged ≥65 years, in the Cardiovascular Health Study, 5511 had data on baseline IADL and were free of prevalent HF. Of these, 1333 (24%) had baseline IADL impairment, defined as self-reported difficulty with one or more of the following tasks: using the telephone, preparing food, performing light and heavy housework, managing finances, and shopping. Propensity scores for IADL impairment, estimated for each of the 5511 participants, were used to assemble a cohort of 1038 pairs of participants with and without IADL impairment who were balanced on 42 baseline characteristics. Centrally adjudicated incident HF occurred in 26% and 21% of matched participants with and without IADL impairment, respectively, during >12 years of follow-up [matched hazard ratio (HR) 1.33; 95% confidence interval (CI) 1.11–1.59; P = 0.002]. Unadjusted and multivariable-adjusted HRs for incident HF before matching were 1.77 (95% CI 1.56–2.01; P < 0.001) and 1.33 (95% CI 1.15–1.54; P < 0.001), respectively. IADL impairment was also associated with all-cause mortality (matched HR 1.19; 95% CI 1.06–1.34; P = 0.004).Among community-dwelling older adults free of baseline HF, IADL impairment is a strong and independent predictor of incident HF and mortality.