Introduction: Many falls in older adults occur during walking and result in lateral falls. The ability to perform a recovery step after balance perturbation determines whether a fall will occur. Aim: To investigate age-related changes in first recovery step kinematics and kinematic adaptations over a wide range of lateral perturbation magnitudes while walking. Methods: Thirty-five old (78.5 ± 5 years) and 19 young adults (26.0 ± 0.8 years) walked at their preferred walking speed on a treadmill. While walking, the subjects were exposed to announced right/left perturbations in different phases of the gait cycle that were gradually increased in order to trigger a recovery stepping response. The subjects were instructed to react naturally and try to avoid falling. Kinematic analysis was performed to analyze the first recovery step parameters (e.g., step initiation, swing duration, step length, and the estimated distance of the center of mass from the base of support [dBoS]). Results: Compared with younger adults, older adults displayed a significantly lower step threshold and at lower perturbation magnitudes during the experiment. Also, they showed slower compensatory step initiation, shorter step length, and dBoS with similar step recovery times. As the perturbation magnitudes increased, older adults showed very small, yet significant, decreases in the timing of the step response, and increased their step length. Younger adults did not show changes in the timing of stepping, with a tendency toward a significant increase in step length. Conclusions: First compensatory step performance is impaired in older adults. In terms of the dynamic approach, older adults were more flexible, i.e., less automatic, while younger adults displayed more automatic behavior.