This study examined whether physical and cognitive function was independently associated with risk of Musculoskeletal Ambulation Disorder Symptom Complex (MADS) in community-dwelling older people. We examined 640 older people (315 men, 325 women; 65–89 years). We assessed physical performance by one-leg standing with eyes open, timed up and go (TUG), muscle strength, muscle power, and gait speed. Cognition was assessed using Mini-Mental State Examination (MMSE), Clinical Dementia Rating (CDR), and Trail-Making Tests (TMT) A and B. We divided participants by physical function into “MADS” (one-leg standing < 15s or TUG ≥ 11s) and “non-MADS”, and identified cognitive impairment if MMSE was < 27 and CDR ≥ 0.5. We also grouped by sex and age (younger-old: 65–74 years and older-old: 75–89 years), and controlled for age, Body Mass Index, education and steps. Physical and cognitive function was significantly worse in the MADS groups. The younger-old men had poorer muscle strength, muscle power and TMT-A. The younger-old women had poorer muscle power, gait speed, MMSE and TMT-B. Older-old men had poorer muscle strength, and older-old women poorer gait speed (P < 0.05). The MADS groups also had significantly higher adjusted odds ratio (OR) for cognitive impairment (younger-old men: OR: 4.62; 95% confidence interval [CI]: 1.08–19.8; younger-old women: OR: 6.09; 95% CI: 1.03–35.9; P < 0.05). This study suggested that poorer physical and cognitive function was significantly associated with the risk of MADS, and these associations may be differ with sex and age.