The objective of this prospective cohort study, conducted in 1998-2002 in New Haven, Connecticut, was to determine the prognostic effect of prior episodes of disability. The analytical sample included 580 community-living persons aged 71 years or older who were nondisabled during an 18-month face-to-face assessment (i.e., zero-time). During monthly telephone interviews, participants were assessed for disability in activities of daily living. The primary explanatory variable was a history of disability in the year prior to zero-time as determined from the monthly interviews. The primary outcome was time to onset of disability over a 3-year period subsequent to zero-time. In Cox proportional hazards analyses that adjusted for several potential confounders, a prior history of disability was found to be significantly associated with development of any disability (i.e., > or = 1 month) and persistent disability (i.e., > or = 2 months); hazard ratios were 2.0 (95% confidence interval: 1.4, 2.7) and 2.0 (95% confidence interval: 1.3, 2.9), respectively. These strong associations were maintained after participants who had a prior history of chronic disability were excluded. Results demonstrate the long-term, deleterious effect of short-term disability among community-living older persons. More frequent assessments of functional status may be warranted in epidemiologic studies and clinical trials when disability is a primary focus.