Background: Anemia is a common problem with serious consequences in older person but is often overlooked despite considerable evidence that low hemoglobin levels indicate physiologic decline in these patients. Multiple studies demonstrate that anemia is an independent risk factor for increased morbidity and mortality, and decreased quality of life in community-dwelling older persons. Increasing functional deterioration is associated with decreasing hemoglobin concentration in an inverse and linear manner. Aim: to assess the prevalence of anemia in free-living elderly subjects living in an urban community of Meet Abbad-Nabaroh, Dakahlia. Egypt and its impact on their functional level. Methodology: A cross-sectional study was done including 93 elderly ≥ 60 ys old, both males and females recruited from Meet Abbad-Nabaroh, Dakahlia, Egypt. All subjects underwent a complete medical history taking, clinical evaluation then blood hemoglobin level was measured, and anemia was defined according to the World Health Organization definition of anemia (hemoglobin level less than 13 g per dL [130 g per L] in men and less than 12 g per dL [120 g per L] in women). Results: The study revealed that the prevalence of anemia is 15.05% among the studied participants (14.5% among the male group and 16.1% among females), 14% had mild anemia and 1% had moderate anemia, with significant increase with age as there was significant difference (p = 0.042) between the different age groups of the studied participants, also history of blood loss and anemia showed positive significant correlation (p-value = 0.001), and highly significant correlations between intake of non steroidal anti inflammatory drugs (NSAID) and anemia (p-value = 0.000). The impact of anemia on functional status and risk of fall respectively showed significant difference between anemic and non anemic as regards instrumental activity of daily living (IADL) (p = 0.007), and timed up and go test (p-value = 0.01), also there is significant corre-* Corresponding author. M. A. Kamel et al. 169 lation between anemia and mini mental state examination (MMSE) (p-value 0.046) with worse performance among the anemic ones. Conclusion & Recommendation: anemia represents a health problem of significance among the community dwelling elderly with bad drawback on their functional level; their need for health & community services has a financial impact so this problem needs more assessment for better prevention and treatment.