Objectives. We compared risk for several medical illnesses between immigrant and US-born older Mexican Americans to determine the relationship between functional health and years of US residency among immigrants. Methods. Cross-sectional, multistage probability sample data for 3050 Mexican Americans aged 65 years or older from 5 US southwestern states were analyzed. Self-rated health, medical illnesses, and functional measures were examined in multivariate regression models that included nativity and years of US residency as key predictors. Results. Self-rated health and medical illnesses of immigrant and US-born groups did not differ significantly. Immigrants with longer US residency had significantly higher cognitive functioning scores and fewer problems with functional activities after adjustment for predisposing and medical need factors. Conclusions. Among older Mexican Americans, immigrant health advantages over their US-born counterparts were not apparent. Immigrants had better health functioning with longer US residency that may derive from greater socioeconomic resources. Our findings suggest that the negative acculturation-health relationship found among younger immigrant adults may become a positive relationship in later life.