Regular physical activity (PA) is associated with reduced risk of the development and progression of musculoskeletal, metabolic and vascular disease. However, PA declines with age and this can contribute to multiple adverse outcomes. The aims of this study were to describe the relationship between accelerometer-determined PA, body composition and sarcopenia (the loss of muscle mass and function with age). Seven-day PA was measured using the GENEactiv accelerometer among 32 men and 99 women aged 74–84 years who participated in the Hertfordshire Sarcopenia Study. We measured mean daily acceleration and minutes/day spent in non-sedentary and moderate-to-vigorous physical activity (MVPA) levels. Body composition was measured by dual-energy X-ray absorptiometry, muscle strength by grip dynamometry and function by gait speed. Sarcopenia was defined according to the EWGSOP diagnostic algorithm. Men and women spent a median (inter-quartile range) of 138.8 (82, 217) and 186 (122, 240) minutes/day engaging in non-sedentary activity but only 14.3 (1.8, 30.2) and 9.5 (2.1, 18.6) min in MVPA, respectively. Higher levels of PA were associated with reduced adiposity, faster walking speed and decreased risk of sarcopenia. For example, a standard deviation (SD) increase in mean daily acceleration was associated with an increase in walking speed of 0.25 (95% CI 0.05, 0.45) SDs and a reduction in the risk of sarcopenia of 35% (95% CI 1, 57%) in fully adjusted analyses. PA was not associated with hand grip strength. Community-dwelling older adults in this study were largely sedentary but there was evidence that higher levels of activity were associated with reduced adiposity and improved function. PA at all intensity levels in later life may help maintain physical function and protect against sarcopenia.Electronic supplementary materialThe online version of this article (10.1007/s00223-018-0413-5) contains supplementary material, which is available to authorized users.