This study examined competing substantive hypotheses about dynamic (i.e., time-ordered) links between memory and functional limitations in old age. We applied the Bivariate Dual Change Score Model to 13-year longitudinal data from the Asset and Health Dynamics Among the Oldest Old Study (AHEAD; N = 6,990; ages 70 – 95). Results revealed that better memory predicted shallower increases in functional limitations. Little evidence was found for the opposite direction that functional limitations predict ensuing changes in memory. Spline models indicated that dynamic associations between memory and functional limitations were substantively similar between participants aged 70-79 and those aged 80-95. Potential covariates (gender, education, health conditions, and depressive symptoms) did not account for these differential lead-lag associations. Applying a multivariate approach, our results suggest that late-life developments in two key components of successful aging are intrinsically interrelated. Our discussion focuses on possible mechanisms why cognitive functioning may serve as a source of age-related changes in health both among the young-old and the old-old.