The purpose of this study was to examine the association of muscle mass and muscle strength with mobility limitation and history of falls in community-dwelling older adults. This cross-sectional study included 420 older adults (207 men, 213 women, 73.7 ± 5.2 years). The participants were classified to following four groups according to their appendicular skeletal muscle mass index (AMI) which was evaluated by bioelectric impedance analysis for skeletal muscle mass in the arms and legs and appendicular skeletal muscle strength Z-score (ASZ) which was calculated from hand-grip strength for upper extremity and peak reaction force during sit-to-stand movement for lower extremity: 1) Low AMI and Low ASZ, 2) Low AMI alone, 3) Low ASZ alone, and 4) Normal. Mobility limitation and history of falls were assessed as a self-reported questionnaire. We used a poisson regression analysis with an adjustment for age, body mass index, knee pain, and back pain. The prevalence of mobility limitation was significantly higher at Low AMI and Low ASZ (relative risk, RR = 5.09, 95% confidence interval, CI 2.08–12.46) and Low ASZ alone (RR = 4.79, 95% CI 2.01–11.39) in men and Low AMI and Low ASZ (RR = 1.70, 95% CI 1.01–2.88) in women than Normal. History of falls was significantly associated with Low ASZ alone (RR = 2.00, 95% CI 1.02–3.91) just in men. These results suggest that low muscle strength per weight rather than low muscle mass per height is an important risk factor to increase mobility limitation in both genders and falls in men.