ABSTRACT:Objective: To assess the prevalence of disability and its association with social capital among community-dwelling elderly. Methods: The study was based on 2 nd Health Survey of Belo Horizonte Metropolitan Region -2010, that included 1,995 community-dwelling elderly, randomly sampled. The exposure of interest was social capital, measured by confidence in neighborhood, perception of the physical environment, sense of cohesion in housing, and neighborhood perception of help. Socio-demographic variables, health conditions and use of health services were considered in the analysis with the purpose of adjustment. Results: Approximately one third of participants (32.6%) were unable to at least one instrumental activity of daily living (IADL) and/or basic activity of daily living (ADL); the prevalence of disability in ADL/IADL was 18.1%, and only in IADL was 14.6%. Elderly with functional disabilities had higher odds of poor social capital, but only the sense of cohesion in housing neighborhood showed to be independently associated with functional disability (OR = 1.80; 95%CI 1.12 -2.88). Conclusions: Our results show the importance of social capital in research on associated factors of functional disability and indicate the need to implement public policies for social and environmental areas, since the needs of the elderly require measures beyond those typical of the health sector.