Older adults are less efficient at avoiding obstacles compared to young adults, especially under attention-demanding conditions. Using functional near-infrared-spectroscopy (fNIRS), recent studies implicated the prefrontal cortex (PFC) in cognitive control of locomotion, notably under dual-task walking conditions. The neural substrates underlying Obstacle Negotiation (ON), however, have not been established. The current study determined the role of the PFC in ON during walking in seniors. Non-demented older adults (n=90; mean age=78.1±5.5 years; %female=51) underwent fNIRS acquisition to assess changes in hemodynamic activity in the PFC during normal-walk [NW] and walk-while-talk [WWT] conditions with and without obstacles. Obstacles were presented as red elliptical shapes using advanced laser technology, which resemble potholes. Linear mixed effects models were used to determine differences in oxygenated hemoglobin (HbO2) levels among the four task conditions. The presence of slow gait, a risk factor for dementia and falls, served as a predictor hypothesized to moderate the effect of obstacles on PFC HbO2 levels. PFC HbO2 levels were significantly higher in WWT compared to NW (p < 0.001) irrespective of ON. Slow gait moderated the effect of obstacles on HbO2 levels across task conditions. Specifically, compared to participants with normal gait, PFC HbO2 levels were significantly increased in ON-NW relative to NW (p = 0.017) and ON-WWT relative to WWT (p < 0.001) among individuals with slow gait. Consistent with Compensatory Reallocation, ON required greater PFC involvement among individuals with mobility limitations.