In aging societies, physical activity may benefit functional fitness influencing the health of older people. The aim of this study was to explore the interrelation between age and perception of health and quality of life, and the mediating effects of functional fitness in older individuals. One hundred and sixty-six late middle-aged (55–64 years, young-old (65–74 years), and old (75–84 years) adults, divided into senior athletes (n = 44), physically active (n = 59), and sedentary individuals (n = 63) were evaluated for functional fitness (flexibility, strength, interlimb coordination, endurance) and physical (Physical Component Summary-PCS) and mental (Mental Component Summary-MCS) health and quality of life perception. Multiple mediation analyses were applied to assess the relationship between age and PCS and MCS indices and the role of functional fitness-related mediators. For MCS only, the mediation analysis showed a positive total and direct effect of age and a negative total indirect effect through mediators. No effects emerged for PCS. Despite a decline in their functional fitness, older individuals were able to maintain a mental health perception, also demonstrating how beneficial effects of physically active lifestyle on functional fitness can positively impact the cognitive-emotional dimension of mental health with advancing age.