OBJECTIVES: To inform public health efforts to promote independent functioning among older adults, we have provided new national estimates of late-life disability that explicitly recognize behavioral adaptations. METHODS: We analyzed the 2011 National Health and Aging Trends Study, a study of Medicare enrollees aged 65 years and older (n = 8077). For 7 mobility and self-care activities we identified 5 hierarchical stages–fully able, successful accommodation with devices, activity reduction, difficulty despite accommodations, and receipt of help–and explored disparities and associations with quality of life measures. RESULTS: Among older adults, 31% were fully able to complete self-care and mobility activities. The remaining groups successfully accommodated with devices (25%), reduced their activities (6%), reported difficulty despite accommodations (18%), or received help (21%). With successive stages, physical and cognitive capacity decreased and symptoms and multimorbidity increased. Successful accommodation was associated with maintaining participation in valued activities and high well-being, but substantial disparities by race, ethnicity, and income existed. CONCLUSIONS: Increased public health attention to behavioral adaptations to functional change can promote independence for older adults and may enhance quality of life.