Introduction: Social isolation among older adults is associated with poor health and premature mortality, but its impact on physical functioning is not fully understood. Previous studies have typically relied on community samples, cross-sectional data, and suboptimal prospective designs. This study generates more robust evidence by investigating the longitudinal associations between social isolation and physical functioning in a large panel of older adults. Methods: Analyses were based on 9 waves of data (2011–2019) from a sample of adults aged ≥65 years from the U.S. National Health and Aging Trends Study (N=12,427 individuals; 54,860 person-year observations) and within-individual fixed-effect panel regression models. Analyses were conducted in 2020. Social isolation was measured using the Social Isolation Index, and physical functioning was measured through the Short Physical Performance Battery. Results: In fully adjusted fixed-effect regression models, each 1-unit increase in the Social Isolation Index resulted in an average decrease of 0.27 units in the Short Physical Performance Battery (95% CI= −0.31, −0.24). This relationship was moderated by age, with the Social Isolation Index bearing a significantly and substantially stronger influence on the Short Physical Performance Battery at older ages than at younger ages. Conclusions: This study confirms that social isolation is associated with deficits in physical functioning among older adults in the U.S. using more robust data and methods than earlier studies. These findings highlight the importance of incorporating strategies to reduce social isolation in policies aimed at promoting successful aging.