Abstract Background Evidence has indicated that depression and obesity were associated with functional disability, independently. However, little is known about the detrimental impact of comorbid depression and obesity, as well as its transition on functional disability. This study investigated the association of baseline depression-obesity status and its dynamic change with incident functional disability among middle-aged and older Chinese. Methods This cohort study included 5507 participants aged ≥45 years from the 2011 and 2015 waves of China Health and Retirement Longitudinal Study. Depression was defined with a score ≥ 10 using the 10-item Centre for Epidemiologic Studies Depression Scale. Obesity was defined as body mass index ≥28 kg/m². Participants were cross-classified by depression and obesity status at baseline, and its change during follow-up. Logistic regression models were constructed to evaluate the association of baseline depression-obesity status and its transition with incident functional disability defined by the Katz index of activities of daily living scale. Results Over four-year follow-up, 510 (9.3%) participants developed functional disability. Individuals with baseline comorbid depression and obesity had the highest risk of functional disability (OR = 2.84, 95% CI: 1.95–4.15) than non-depressive participants without obesity, or those with depression or obesity alone. When investigating the dynamic changes of depression-obesity status on functional disability incidence, those with stable comorbidity throughout two surveys had the greatest risk of functional disability (OR = 4.06, 95% CI: 2.11–7.80). Progression of depression-obesity status was associated with increased risk of functional disability, while regression from baseline to follow-up was linked to attenuated risk estimates. Conclusions Among middle-aged and older Chinese adults, the risk of functional disability was exaggerated with comorbid depression and obesity. Our data further suggest that transitions of depression and obesity over time are associated with the risk of developing functional disability.