OBJECTIVE Objective measurements of outdoor time are essential to establishing evidence about the health benefits of going outdoors among older adults. To better understanding the health benefits of going outdoors, clarification of potential mediators to connect going outdoors with health benefits is necessary. The present study aimed to investigate associations of objectively-measured outdoor time with older adults' physical and psychological function, and examine the mediating role of physical activity on these associations. METHODS Baseline data from a randomized control trial of physical activity among older adults with global cognitive impairment was used. Data from 192 participants were analyzed. Measures included steps-per-day, objectively-measured outdoor time per day using global positioning systems, physical function (cardiorespiratory fitness, lower-extremity strength), psychological function (depression, well-being) and basic factors. RESULTS Path analysis showed that outdoor time was significantly associated with steps-per-day (path coefficient = 0.23) and depression (path coefficient = -0.16). Outdoor time was not directly associated with cardiorespiratory fitness, lower-extremity strength and well-being. However, steps-per-day was associated with cardiorespiratory fitness (path coefficient = 0.18), lower-extremity strength (path coefficient = -0.22) and well-being (path coefficient = 0.14). CONCLUSIONS We found that objectively-measured outdoor time was indirectly associated with physical function, and both directly and indirectly with psychological function through physical activity among older adults. This finding indicates that going outdoors influences older adults' health outcomes, and is mainly mediated by physical activity. Geriatr Gerontol Int 2017; 17: 1455-1462.