Sarcopenia is associated with functional disability in older adults. However, no consistent conclusions have been reached considering the differences in the measurement and criteria of sarcopenia. We aimed to examine the association between sarcopenia status and functional disability based on China Health and Retirement Longitudinal Study (CHARLS). A nationally representative longitudinal study. Participants aged at least 60 years old from the CHARLS 2015y were included. Sarcopenia was assessed according to the Asian Working Group for Sarcopenia 2019 algorithm. The outcomes of this study were basic activities of daily living (ADLs) and instrumental activities of daily living (IADLs). The logistic regression model was conducted to analyze the cross-sectional and longitudinal associations between sarcopenia status and ADLs and IADLs disability. In the cross-sectional study, 37.2% of the 6893 participants were defined as having sarcopenia. Any form of sarcopenia was associated with ADLs and IADLs disability. During three years of follow-up, 786 (16.5%) participants developed new-onset ADLs disability, and 980 (22.5%) participants developed new-onset IADLs disability. Compared with the no-sarcopenia, participants with possible sarcopenia (OR: 1.62, 95%CI: 1.34-1.95), sarcopenia (OR: 1.58, 95%CI: 1.18-2.11), or total sarcopenia (OR: 1.58, 95%CI: 1.34-1.88) had a higher risk of ADLs disability. While, the risk of IADLs disability for participants with possible sarcopenia (OR: 1.68, 95%CI: 1.41-2.00), sarcopenia (OR: 1.87, 95%CI: 1.40-2.51), or total sarcopenia (OR: 1.71, 95%CI: 1.45-2.00) was still significantly increased. With statistical interaction between sarcopenia status and residence or sex in ADLs and IADLs disability, older adults in urban, with ORs ranging from 2.14 to 2.44, were at a higher risk of functional disability than those in rural. Possible sarcopenia was associated with a much higher risk of ADLs disability (OR: 1.68, 95%CI: 1.26-2.25) in males and a higher risk of IADLs disability (OR: 1.98, 95%CI: 1.56-2.52) in females. Sarcopenia was associated with an increased risk of ADLs and IADLs disability among older Chinese adults. Even possible sarcopenia still significantly impacted ADLs and IADLs disability, and this association varied by sex and residence.