Abstract Background Understanding if and how pain influences activities of daily living (ADL) in dementia is essential to improving pain management and ADL functioning. This study examined the relationship between the course of pain and change in ADL functioning, both generally and regarding specific ADL functions. Methods Participants were Dutch nursing home residents (n = 229) with advanced dementia. ADL functioning was assessed with the Katz ADL scale, and pain with the Dutch version of the Pain Assessment Checklist for Seniors with Limited Ability to Communicate (PACSLAC-D). Changes of PACSLAC-D and Katz ADL scores were computed based on the difference in scores between baseline, 3-month and 6-month follow-up. Multivariate linear regression models were used to assess the relationships between change in pain score, change in total ADL score and specific ADL item scores during follow-up. Results At baseline, residents had a median ADL score of 18 (interquartile range 13–22, range 6–24) and 48% of the residents were in pain (PACSLAC-D ≥ 4). Residents with pain were more ADL dependent than residents without pain. A change in pain score within the first 3 months was a significant predictor for a decline in ADL functioning over the 6-month follow-up (B = 0.10, SE = 0.05, P = 0.045), and specifically, a decline on the items ‘transferring’ over the 6-month follow-up and ‘feeding’ during the first 3 months of follow-up. Conclusions Pain is associated with ADL functioning cross-sectionally, and a change in pain score predicts a decline in ADL functioning, independent of dementia severity. Awareness of (changes in) ADL activities is clearly important and might result in both improved recognition of pain and improved pain management.