Functional fitness is essential in older adults. This study assessed the physical and mental effects of a 16-week exercise intervention based on the Fullerton Functional Fitness Test (FFFT) in adults over 60. Thirty-eight participants (66% women), Mage = 80.15, SD = 7.21, were randomized into exercise (n = 24) and waiting list control (n = 14) groups. The former trained thrice weekly for one hour. Objective tests (FFFT and handgrip power) and subjective psychological measures (life satisfaction, resilience, happiness, perceived stress, and well-being) were evaluated at baseline, after eight weeks, and after 16 weeks. The data were analyzed using mixed-effect regression models. Post-hoc analyses revealed the group differences. The results yielded statistically significant interaction effects (group × time) in all models, indicating improvements in physical and psychological measures over time in the treatment group compared to the control group. Furthermore, significant differences between the groups in estimated marginal means (with adjusted 95% confidence intervals) emerged in happiness after 16 weeks (-3.5 [-6.5, -0.4]), resilience (-5.5 [-9.9, -1.2]), perceived stress (2.2 [0.2, 4.2]), well-being (-5.8 [-7.9, -3.6]), upper limb strength (-5.7 [-9.0, -2.4]), upper body flexibility (-8.7 [-16.4, -1.0]), and agility and balance (4.6 [1.2, 8.1]). Among these measures, the differences existed even after 8-weeks, except for happiness and resilience. In conclusion, functional fitness training lasting only 16 weeks can benefit older adults both physically and mentally.