Objectives: Anemia is associated with functional disability among older adults in general. However, the relationship between anemia and functional disability has not been well characterized among older adults with cancer. Therefore, we examined the association between anemia and functional disability in patients with cancer aged 65 years or older. Patients and Methods: We conducted cross-sectional analysis of data derived from a multicenter prospective study of 500 patients with cancer aged 65 years or older. The primary outcome was functional disability at chemotherapy initiation, defined as the need for assistance with at least one instrumental activity of daily living. Anemia (using WHO criteria) was defined as a hemoglobin (Hb) level of less than 12 g/dL in women and less than 13 g/dL in men. Multivariable logistic regression was used to examine the association between anemia and functional disability. Results: Among 491 evaluable patients (median age, 73.1 years [range, 65–91 years]), the prevalence of functional disability and anemia was 43% and 51%, respectively. Compared with patients without anemia, patients with anemia were more likely to report functional disability. On multivariable analysis, adjusting for sex, stage, and unintentional weight loss, patients with anemia were more likely to have functional disability (odds ratio, 2.40; 95% CI, 1.61–3.59). Conclusions: Anemia was highly prevalent and independently associated with functional disability in this cohort of older adults with cancer. Given the importance of functional status in cancer treatment decision-making, longitudinal studies evaluating the causal relation between anemia and functional status among older patients with cancer are warranted to evaluate causality.