(1) Background: Aging is associated with a progressive decline in physical capacity, which is further exacerbated by conditions such as arthritis and chronic joint pain. This study aimed to compare the effects of aquatic and land-based exercise on the functional fitness of older adult women. (2) Methods: Sixty older women (mean age 66.9 ± 3.8 years) participated in this study, divided into two groups: aquatic exercise and land-based exercise. Both groups completed functional fitness tests, including flexibility (Back Scratch and Chair Sit-and-Reach Tests), lower body strength (Chair Stand Test), and dynamic balance (8-Foot Up-and-Go Test). Statistical analyses compared group performance. (3) Results: Improvements in flexibility were observed in the aquatic group, with trends toward significance for the Back Scratch Test (−0.2 ± 1.0 cm vs. −2.0 ± 0.0 cm, p = 0.08) and the Chair Sit-and-Reach Test (2.87 ± 2.0 cm vs. 0.27 ± 1.0 cm, p = 0.07). No statistically significant differences were observed between the groups in measures of lower body strength (Chair Stand Test: 19.1 ± 4.47 reps vs. 18.97 ± 3.77 reps, p = 0.9) or dynamic balance (8-Foot Up-and-Go Test: 6.28 ± 6.2 s vs. 6.03 ± 5.83 s, p = 0.07). (4) Conclusions: Aquatic exercise showed greater improvements in flexibility, particularly in the upper and lower body, although these differences did not reach statistical significance. Both training modalities were equally effective in maintaining lower body strength and dynamic balance in older adult women. These findings support the inclusion of tailored exercise programs in aging populations to address specific functional needs.