The presence of apolipoprotein-epsilon 4 (APOE-epsilon 4) significantly increases the risk of Alzheimer's disease (AD). The association between APOE-epsilon 4 status and functional abilities was explored further in a multicultural sample of community-dwelling, non-demented elders. The sample was limited to cognitively-intact, community-dwelling elders, who were free of stroke or other neurologic disability. In 218 elders who met research criteria, the presence of APO-epsilon 4 was associated with poorer functional status, apart from the effects of neuropsychological performance, gender, age, and education (OR = 2.5, 95% CI: 1.3, 4.9). In 158 subjects without an APOE-epsilon 4 allele, 50% reported no functional limitation; in the 60 subjects with an epsilon 4 allele, only 28% reported no functional limitation (P < .01). The relationship was not explained by the distribution of co-morbidities. The association between poorer function and the presence of an APOE-epsilon 4 allele was evident in each ethnic group. In path analyses, the presence of an APOE-epsilon 4 allele was associated with decreased functional ability in non-demented elders not simply through an association with poorer cognitive status, but also independently. These results suggest that the APOE-epsilon 4 genotype is associated with functional deficit in people with normal neuropsychological profiles.