The aim of this study was to examine female sexual functioning and its association with the impact of the symptoms of menopause among Spanish postmenopausal women. A total of 182 postmenopausal women (65.59 ± 7.93 years) participated in this cross-sectional study. The female sexual function index (FSFI) and the menopause rating scale (MRS) were used to analyze sexual function and severity of menopausal symptoms, respectively. Age, education, area of residence, occupation, and depression (Hospital Anxiety and Depression Scale) were considered as possible confounders. The results of a linear multivariate regression analysis showed that the severity of urogenital menopause-related symptoms was associated with lower values in the FSFI total score and the lubrication, satisfaction, arousal, and orgasm domains. These last three subscales were also linked to severe psychological impact, while the MRS total score was only related to the desire domain. Regarding confounders, being younger, working, and residing in a rural area were all linked to better sexual function. All effect sizes were large (adjusted R2 > 0.35). In conclusion, after controlling for possible confounders, postmenopausal women who experience a severe impact of menopausal symptoms endure poorer sexual function, particularly when said symptoms are urogenital or psychological in nature.