Higher-level functional capacity (HLFC) is crucial for the independent living of older adults. While internet use positively impacts the health of older adults, its effect on HLFC and how this effect varies with educational attainment remains uncertain. This longitudinal study aimed to investigate whether internet use could mitigate the risk of HLFC decline and if this benefit extends to older adults with lower levels of education. The data were sourced from the Japan Gerontological Evaluation Study (JAGES), encompassing 8050 community-dwelling adults aged 65 years and older from 2016 to 2019. The study focused on those who remained self-sufficient from 2016 to 2019, identifying participants with independent HLFC in 2016. The Tokyo Metropolitan Institute of Gerontology Index of Competence defined HLFC operationally, consisting of 3 subscales, namely instrumental activities of daily living, intellectual activity, and social role. The primary variable was the frequency of internet use in 2016; participants who reported using the internet were classified as internet users, while those who answered "No" were identified as nonusers. The study compared the effects of internet use on HLFC decline across educational levels of ≤9 years, 10-12 years, and ≥13 years using Poisson regression analysis adjusted for robust SE to calculate the risk ratio (RR) and 95% CI for HLFC decline in 2019. After adjusting for demographic and health condition risk factors, internet use was significantly linked to a decreased risk of HLFC decline in older adults over 3 years, including those with lower educational levels. Internet users with ≤9 years of educational attainment experienced a suppressed decline in the total score (RR 0.57, 95% CI 0.43-0.76; P<.001); instrumental activities of daily living (RR 0.58, 95% CI 0.38-0.91; P=.02), intellectual activity (RR 0.60, 95% CI 0.41-0.89; P=.01), and social role (RR 0.74, 95% CI 0.56-0.97; P=.03) compared with nonusers. Participants with 10-12 years of education showed suppression rates of 0.78 (95% CI 0.63-0.98; P=.03), 0.59 (95% CI 0.39-0.90; P=.01), 0.91 (95% CI 0.63-1.31; P=.61), and 0.82 (95% CI 0.68-1.00; P=.05), respectively, and those with ≥13 years displayed suppression rates of 0.65 (95% CI 0.51-0.85; P=.001), 0.55 (95% CI 0.36-0.83; P=.01), 0.64 (95% CI 0.37-1.10; P=.11), and 0.83 (95% CI 0.64-1.08; P=.17), respectively. These findings indicate that internet use supports the maintenance of HLFC independence in older adults with higher education and those with lower educational levels. Encouraging internet use among older adults with lower levels of education through future policies could help narrow functional health disparities associated with educational attainment.