Using the National Health and Aging Trends Study (NHATS), we examined baseline activity and functional status. Respondents were classified as High (n=1,662), Moderate (n=1,973), or Low (n=989) Function and rated importance of and actual participation in four activities. Transportation and health were also examined. Individuals classified as low function were less likely to engage in valued activities and more likely to report that poor health and transportation limited participation, compared to individuals with no or moderate functional impairments. Data suggest the importance of developing interventions which bridge the gap between activity preferences and participation for older adults with functional limitations.