To test the hypothesis that higher-challenge gait and balance tasks are more sensitive than traditional metrics to subtle patient-reported gait dysfunction and future fall risk in early multiple sclerosis (MS). Persons with early MS (n = 185; ≤5 years diagnosed) reported gait function (MS Walking Scale) and underwent traditional disability metrics (Expanded Disability Status Scale [EDSS], Timed 25 Foot Walk). Patients and healthy controls (n = 50) completed clinically feasible challenge tasks of gait endurance (2-Minute Walk Test), standing balance (NIH Toolbox), and dynamic balance (balance boards; tandem walk on 2 ten-foot boards of different widths, 4.5 and 1.5 in). MRI assessed global and regional brain volumes, total T2 lesion volume (T2LV), infratentorial T2LVs and counts, and cervical cord lesion counts. Falls, near falls, and fall-related injuries were assessed after 1 year. We examined links between all tasks and patient-reported gait, MRI markers, and fall data. Patients performed worse on higher challenge balance, but not gait, tasks compared with healthy controls. Worse patient-reported gait disturbance was associated with worse performance on all tasks, but only dynamic balance was sensitive to mild patient-reported gait difficulty. Balance tasks were more correlated with MRI metrics than were walking tasks or EDSS score. Thirty percent of patients reported either a fall or near fall after 1 year, with poor dynamic balance as the only task independently predicting falls. Balance plays a leading role in gait dysfunction early in MS. Clinically feasible higher-challenge balance tasks were most sensitive to patient-reported gait, MRI disease markers, and risk of future falls, highlighting potential to advance functional outcomes in clinical practice and trials.