Aim Previous literature has found positive correlations between social capital and health in older adults, fewer studies have investigated the subdimension's effects of social capital on health. We aimed to determine the individual social capital subfactors in community‐dwelling older adults in Japan, and to analyze the associations of these factors with physical and mental health. Method We sent a self‐administered questionnaire assessing their perception of social group activity as the individual social capital, and mental and physical health (measured by the Medical Outcomes Study Short Form‐36) to 4320 randomly selected older people. Results There were 1836 valid responses. We clarified that people who participated in any social activity group were in significantly better physical and mental health compared with the people who did not. By the factor analysis of the perception for the social group activity, we identified three components of the individual social capital aspect that we termed harmonious, hierarchic and diversity. Using multiple linear regression, we found the hierarchic aspect was significantly negatively associated with mental health, whereas the harmonious aspect was significantly positively associated with mental and physical health, and diversity was significantly positively associated with mental health. Conclusion As the previous research literature on social capital has mainly emphasized its positive health consequences, the present findings provide a novel demonstration that some aspects of individual social capital can have negative associations with health outcomes in community‐dwelling older people. For the practical application of promoting a healthier society, it is important to consider both the positive and negative sides of social capital. Geriatr Gerontol Int 2017; ••: ••–••.