The purpose of this study was to test the construct validity of the hierarchical levels of self-reported physical disability using health-related variables and physical-performance tests as criteria. The study participants were a community-based sample of 368 adults age 60 years or older. These older adults were grouped into 4 levels according to their physical-disability status (able, mildly disabled, moderately disabled, and severely disabled groups) based on their self-reported measures on the mobility, instrumented activity of daily living (IADL), and activities of daily living (ADL) domains. Health-related variables (body-mass index, number of comorbidities, depression status, mental status, and self-perceived health status) and eight performance-based tests demonstrated significant group differences. Self-reported measures of physical disability can be used to categorize older adults into different stages of physical functional decline.