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Objectives: To estimate the prevalence of neuropsychiatric symptoms and examine their association with functional limitations., Design: Cross-sectional analysis., Setting: The Aging, Demographics, and Memory Study (ADAMS)., Participants: A sample of adults aged 71 and older (N=856) drawn from Health and Retirement Study (HRS), a nationally representative cohort of U.S. adults aged 51 and older., Measurements: The presence of neuropsychiatric symptoms (delusions, hallucinations, agitation, depression, apathy, elation, anxiety, disinhibition, irritation, and aberrant motor behaviors) was identified using the Neuropsychiatric Inventory. A consensus panel in the ADAMS assigned a cognitive category (normal cognition; cognitive impairment, no dementia (CIND); mild, moderate, or severe dementia). Functional limitations, chronic medical conditions, and sociodemographic information were obtained from the HRS and ADAMS., Results: Forty-three percent of individuals with CIND and 58% of those with dementia exhibited at least one neuropsychiatric symptom. Depression was the most common individual symptom in those with normal cognition (12%), CIND (30%), and mild dementia (25%), whereas apathy (42%) and agitation (41%) were most common in those with severe dementia. Individuals with three or more symptoms and one or more clinically significant symptoms had significantly higher odds of having functional limitations. Those with clinically significant depression had higher odds of activity of daily living limitations, and those with clinically significant depression, anxiety, or aberrant motor behaviors had significantly higher odds of instrumental activity of daily living limitations., Conclusion: Neuropsychiatric symptoms are highly prevalent in older adults with CIND and dementia. Of those with cognitive impairment, a greater number of total neuropsychiatric symptoms and some specific individual symptoms are strongly associated with functional limitations.