When balance is disturbed, location of the center of pressure (COP) contributes to a person’s ability to recover from a perturbation. This study investigated COP control prior to first step lift-off (FSLO) during lateral perturbations in older non-fallers and fallers. 38 Non-Fallers and 16 Fallers received lateral waist-pulls at 5 different intensities. Crossover stepping responses at the intensity level where the largest number of subjects responded with crossover steps were analyzed. Whole-body center of mass (COM) and COP positions in the medio-lateral (ML) direction with respect to the base of support (BOS), and COP velocity were calculated. An inverted pendulum model was used to define the BOS stability boundary at FSLO, which was also adjusted using the COP position at FSLO (functional boundary). No significant differences were found in the COP velocities between Fallers and Non-Fallers (p>.093). However, the COP positions for Fallers were located significantly more medial at FSLO (p≤.01), resulting in a significantly reduced functional boundary. Although the stability margins, measures of stability based on the BOS, were significantly larger than zero for Fallers (p≤.004), they were not significantly different from zero for the functional boundary, i.e., reaching the functional stability limit. Fallers had reduced functional limits of stability in the ML direction, which would predispose them to more precarious stability conditions than Non-Fallers. This could be a cause for taking more steps than Non-Fallers for balance recovery as we observed. The functional boundary estimation may be a more sensitive marker of balance instability than the BOS boundary.