Peripheral neuropathy is underappreciated as a potential cause of functional limitations. In the present article, we assessed the cross-sectional association between peripheral neuropathy and physical functioning and how the longitudinal association between age and functioning differed by neuropathy status. Physical functioning was measured in 1996-2008 using timed performances on stair-climb, walking, sit-to-stand, and balance tests at the Michigan site of the Study of Women's Health Across the Nation, a population-based cohort study of women at midlife (n = 396). Peripheral neuropathy was measured in 2008 and defined as having an abnormal monofilament test result or 4 or more symptoms. We used linear mixed models to determine whether trajectories of physical functioning differed by prevalent neuropathy status. Overall, 27.8% of the women had neuropathy. Stair-climb time differed by neuropathy status (P = 0.04), and for every 1-year increase in age, women with neuropathy had a 1.82% (95% confidence interval: 1.42, 2.21) increase compared with a 0.95% (95% confidence interval: 0.71, 1.20) increase for women without neuropathy. Sit-to-stand time differed by neuropathy status (P = 0.01), but the rate of change did not differ. No differences between neuropathy groups were observed for the walk test. For some performance-based tasks, poor functioning was maintained or exacerbated for women who had prevalent neuropathy. Peripheral neuropathy may play a role in physical functioning limitations and future disability.