Objectives. To inform public health efforts to promote independent functioning among older adults, we have provided new national estimates of late-life disability that explicitly recognize behavioral adaptations. Methods. We analyzed the 2011 National Health and Aging Trends Study, a study of Medicare enrollees aged 65 years and older (n = 8077). For 7 mobility and self-care activities we identified 5 hierarchical stages—fully able, successful accommodation with devices, activity reduction, difficulty despite accommodations, and receipt of help—and explored disparities and associations with quality of life measures. Results. Among older adults, 31% were fully able to complete self-care and mobility activities. The remaining groups successfully accommodated with devices (25%), reduced their activities (6%), reported difficulty despite accommodations (18%), or received help (21%). With successive stages, physical and cognitive capacity decreased and symptoms and multimorbidity increased. Successful accommodation was associated with maintaining participation in valued activities and high well-being, but substantial disparities by race, ethnicity, and income existed. Conclusions. Increased public health attention to behavioral adaptations to functional change can promote independence for older adults and may enhance quality of life.