To describe prospective associations between ambulatory activity (AA), body composition and muscle function in older adults, 697 community-dwelling participants (49% female; mean age=62 ± 7 years) were assessed for changes in body fat and leg lean mass using dual-energy x-ray absorptiometry, leg strength using dynamometer, and whole body muscle quality (WBMQ; an estimate of specific force) over 2.6 ± 0.4 years. AA was negatively associated with fat mass in both sexes but baseline AA did not predict change in fat mass. Habitual AA was weakly, but significantly, negatively associated with change in total body fat (−0.16 kg/step × 103/day, P=0.011) and trunk fat (−0.12 kg/step × 103/day, P=0.044) in men. Habitual AA was also weakly, but significantly, positively associated with change in leg lean mass in both men and women (both P<0.05), as well as change in leg strength (1.37 kg/step × 103/day, P=0.001) and WBMQ (0.03 kg/kg/step × 103/day, P=0.002) in women only. Partial R2s for these associations were in the range of 1.2–3.2%. Although, these associations are modest, increases in objectively assessed physical activity may represent a target for improving body composition and muscle function in community-dwelling older adults.