In Japan's public health system, dentists can assess and intervene in oral hypofunction cases. However, the associations between oral hypofunction and health outcomes and costs remain unclear. This study aimed to identify these associations. This retrospective cohort study using a Japanese health insurance claims database included 45 916 individuals aged ≥65 years who underwent dental examinations for oral hypofunction. The primary outcomes were incidence rates of aspiration pneumonia, femoral or vertebral fractures and all-cause mortality. Secondary outcomes were annual medical and dental costs. We used competing risk regression and Cox models to estimate primary outcomes, and gamma regression models for secondary outcomes. The adjusted hazard ratios were 0.84 (95% CI 0.74-0.96) for the incidence of aspiration pneumonia, 1.11 (1.02-1.21) for the incidence of femoral or vertebral fractures and 1.27 (1.07-1.50) for all-cause mortality in individuals with oral hypofunction compared with those without. The adjusted relative risk was 1.05 (1.01-1.10) for annual medical costs and 0.94 (0.81-1.09) for annual dental costs in individuals with oral hypofunction compared with those without. Individuals with oral hypofunction were at increased risk of femoral or vertebral fractures and all-cause mortality, and they incurred significantly higher annual medical costs, compared with those without this condition. Notably, they showed a lower risk of aspiration pneumonia, suggesting potential benefits of dental intervention. Integrating dental care into medical strategies might be necessary to improve health outcomes and reduce healthcare costs for those with oral hypofunction. Geriatr Gerontol Int 2024; 24: 1053-1059.