Background: Oral dysfunction is related to long-term cares including activities of daily living. The objective of this study was to determine the association between oral function and the bone-related physiological substances osteocalcin (OC) and insulin-like growth factor-1 (IGF-1). Methods: The study participants were 139 community-dwelling older people in Japan. Evaluation of oral dysfunction was based on subjective judgment by each participant. Blood analysis included OC, IGF-1, and albumin. Results: Univariate and multiple logistic analyses showed that IGF-1 was significantly associated with a “decline in masticatory function” (p = 0.0074 and p = 0.0308, respectively). Receiver operating characteristic curve analysis of IGF-1 levels revealed a threshold score of 108 ng/mL (p < 0.01) for discriminating a “decline in masticatory function”. Logistic regression analysis revealed that participants with an IGF-1 level ≤108 ng/mL had an odds ratio of 4.31 (p < 0.05) for a “decline in masticatory function”. No significant association was found between the OC level and oral dysfunction. Conclusions: These results suggest a possible relationship between lower serum IGF-1 levels and a decline in masticatory dysfunction in community-dwelling older people.