Social frailty affects various aspects of health in community-dwelling older adults. This study aimed to identify the prevalence of social frailty and the significance of its association with South Korean older adults’ health status and life satisfaction. This study involved a secondary data analysis of the 2017 National Survey of Older Koreans. From the 10,299 respondents of the survey, 10,081 were selected with no exclusion criteria. Multiple regression analyses were conducted to identify the factors related to life satisfaction. Compared with the robust and social prefrailty groups, the social frailty group had higher nutritional risk (χ² = 312.161, p = 0.000), depressive symptoms (χ² = 977.587, p = 0.000), cognitive dysfunction (χ² = 25.051, p = 0.000), and lower life satisfaction (F = 1050.272, p = 0.000). The results of multiple linear regression, adjusted for sociodemographic and health-related characteristics, indicated that social frailty had the strongest negative association with life satisfaction (β = −0.267, p = 0.000). However, cognitive function was significantly positively associated with life satisfaction (β = 0.062, p = 0.000). Social frailty was significantly correlated with physical, psychological, and mental health as well as life satisfaction in community-dwelling older South Koreans. Therefore, accounting for the social aspect of functioning is an essential part of a multidimensional approach to improving health and life satisfaction in communities.