To provide a longitudinal analysis of how functional decline over time among older adults affects provision of family and unpaid care, overall and stratified by dementia status. Longitudinal cohorts of community-dwelling adults ≥65 years between 2015 and 2017 from the National Health and Aging Trends Study (NHATS; n = 5,103) and their caregivers from the National Study of Caregiving (n = 862 caregivers for 595 NHATS care recipients). A panel data fixed-effects model was used to examine how increases in mobility, self-care, and household activity-related impairment between 2015 and 2017 affected family and unpaid care (care recipient reported: total number of family and unpaid caregivers, total hours of care received; caregiver reported: hours of care provided, caregiving-related emotional, and physical difficulties). Among community-dwelling older adults overall, impairment in 1 additional self-care activity led to 0.12 more caregivers and 19 additional total monthly hours of care. Among those with dementia, impairment in 1 additional self-care activity led to 0.14 more caregivers and 28 additional total monthly hours of care; among those without dementia, this was 0.11 caregivers and 15 total monthly hours of care. For dementia caregivers, impairment in 1 additional self-care activity among their care recipients led to 8% higher probability of caregiving-related emotional difficulty. There is a mismatch between the large additional hours of care received by older adults who experience functional decline (particularly self-care activities) and the relatively small accompanying increase in family and unpaid caregivers. Targeted functional supports, particularly for self-care activities, may benefit both older adults and their caregivers.