Objectives: Perceived discrimination has been associated with poor physical and psychological health. There is limited research examining perceived discrimination in older adults, and its effects on health in later life. The aim of this study is to extend research in this area by examining longitudinal associations between reported everyday discrimination and physical and cognitive function in older adults. Method: The present study uses a national sample of 4,886 community-dwelling individuals aged 60 years and older from the English Longitudinal Study of Ageing. Perceived discrimination was assessed at baseline by asking participants about the frequency with which they experienced 5 everyday discriminatory situations. Cognitive functioning, comprising tests of recall and a test of verbal fluency, and physical functioning, comprising a timed walk test, were measured identically at baseline and follow-up. Multiple regression analyses were performed, adjusting for sociodemographic and health status variables. Results: At baseline, 39.3% of participants reported being discriminated against at least a few times a year. After adjusting for demographic variables, health status, and depression, baseline discrimination was associated with poorer recall (B = −0.26, 95% CI [−0.44, −0.08]) and slower gait speed (B = −0.02, 95% CI [−0.03, −0.004]) at follow-up. Discrimination was not associated with poorer verbal fluency (B = −0.12, 95% CI [−0.45, 0.22]) at follow-up. Conclusions: The experience of discrimination is common among older adults and is associated with poorer physical and cognitive functioning. Addressing issues around discrimination in older adults may contribute to maintaining functioning in later life.