Objective: To examine the relationship between neuropsychological functioning and performance-based functional capacity in veterans with a history of mild traumatic brain injury (mTBI), as well as the moderating effects of age and psychiatric symptoms on this relationship. Setting: Three Veterans Affairs medical centers. Participants: One hundred nineteen Iraq/Afghanistan veterans with a history of mTBI and self-reported cognitive difficulties. Design: Cross-sectional, secondary data analysis of baseline measures in a randomized controlled trial. Main Measures: The main outcome measure, functional capacity, was assessed using the objective and performancebased University of California San Diego Performance-based Skills Assessment-Brief. A global deficit score (GDS) was created as a composite score for performance on a battery of neuropsychological measures assessing domains of attention, processing speed, executive functioning, and verbal memory performance. Posttraumatic stress disorder (PTSD) symptom severity was assessed using the PTSD Checklist-Military Version, and depressive symptom severity was assessed using the Beck Depression Inventory, Second Edition. Results: Bivariate analyses indicated that worse neuropsychological performance (ie, higher GDS) and greater PTSD symptom severity were associated with worse communication abilities and worse overall functional capacity. Multiple linear regressions demonstrated that GDS and PTSD symptom severity explained 9% of the variance in communication and 10% of the variance in overall functional capacity; however, GDS emerged as the only significant predictor in both regressions. Age, PTSD, and depressive symptom severity did not moderate the relationship between GDS and overall functional capacity. Performance in the verbal learning and memory domain emerged as the strongest neuropsychological predictor of communication and overall functional capacity. Conclusions: Worse neuropsychological functioning was moderately associated with worse performance-based functional capacity, even when accounting for PTSD symptom severity. Verbal learning and memory was the primary neuropsychological domain driving the relationship with functional capacity; improvement in verbal learning and memory may translate into improved functional capacity.