Normal aging and Alzheimer’s disease (AD) cause profound changes in the brain’s structure and function. AD in particular is accompanied by widespread cortical neuronal loss, and loss of connections between brain systems. This degeneration of neural pathways disrupts the functional coherence of brain activation. Recent innovations in brain imaging have detected characteristic disruptions in functional networks. Here we review studies examining changes in functional connectivity, measured through fMRI (functional magnetic resonance imaging), starting with healthy aging and then Alzheimer’s disease. We cover studies that employ the three primary methods to analyze functional connectivity—seed-based, ICA (independent components analysis), and graph theory. At the end we include a brief discussion of other methodologies, such as EEG (electroencephalography), MEG (magnetoencephalography), and PET (positron emission tomography). We also describe multi-modal studies that combine rsfMRI (resting state fMRI) with PET imaging, as well as studies examining the effects of medications. Overall, connectivity and network integrity appear to decrease in healthy aging, but this decrease is accelerated in AD, with specific systems hit hardest, such as the default mode network (DMN). Functional connectivity is a relatively new topic of research, but it holds great promise in revealing how brain network dynamics change across the lifespan and in disease.