BACKGROUND Australian Aboriginal people are disproportionately affected by physical disability; the reasons for this are unclear. This study aimed to quantify associations between severe physical functional limitations and socio-demographic and health-related factors among older Aboriginal and non-Aboriginal adults. METHODS Questionnaire data from 1,563 Aboriginal and 226,802 non-Aboriginal participants aged ≥45 years from the Sax Institute's 45 and Up Study (New South Wales, Australia) were used to calculate age- and sex-adjusted prevalence ratios (aPRs) for severe limitation [MOS-PF score <60] according to socio-demographic and health-related factors. RESULTS Overall, 26% (410/1563) of Aboriginal participants and 13% (29,569/226,802) of non-Aboriginal participants had severe limitations (aPR 2.8, 95%CI 2.5-3.0). In both Aboriginal and non-Aboriginal participants, severe limitation was significantly associated with: being ≥70 vs <70 years old (aPRs 1.8, 1.3-2.4 and 5.3, 5.0-5.5, within Aboriginal and non-Aboriginal participants, respectively), none vs tertiary educational qualifications (aPRs 2.4, 1.7-3.3 and 3.1, 3.0-3.2), lower vs higher income (aPRs 6.6, 4.2-10.5 and 5.5, 5.2-5.8), current vs never-smoking (aPRs 2.0, 1.6-2.5 and 2.2, 2.1-2.3), obese vs normal weight (aPRs 1.7, 1.3-2.2 and 2.7, 2.7-2.8) and sitting for ≥7 vs <7 hours/day (aPRs 1.6, 1.2-2.0 and 1.6, 1.6-1.7). Severe limitations increased with increasing ill-health, with aPRs rising to 5-6 for ≥5 versus no chronic conditions. It was significantly higher in those with few vs many social contacts (aPRs 1.7, 1.4-2.0 and 1.4, 1.4-1.4) and with very high vs low psychological distress (aPRs 4.4, 3.6-5.4 and 5.7, 5.5-5.9). CONCLUSIONS Although the prevalence of severe physical limitation among Aboriginal people in this study is around three-fold that of non-Aboriginal people, the factors related to it are similar, indicating that Aboriginal people have higher levels of risk factors for and consequences of severe limitations. Effective management of chronic disease and reducing the prevalence of obesity and smoking are important areas for attention.