Objective: This study investigated the risk of cognitive and functional impairment in older Mexicans diagnosed with arthritis. Participants included 2,681 Mexicans, aged ≥60 years, enrolled in the Mexican Health and Aging Study cohort. Method: Participants were categorized into arthritis and no arthritis exposure groups. Primary outcome included participants categorized into "cognitively impaired" or "cognitively normal" groups. Secondary outcomes included participants categorized into Normal, Functionally Impaired only, Cognitively Impaired only, or Dementia (both cognitively and functionally impaired) groups. Multivariable logistic and multinomial regression models were used to assess the relationships. Results: Overall, 16% or 7% were diagnosed with cognitive impairment or dementia. Compared with older Mexicans without arthritis, those who were diagnosed with arthritis had significantly increased risk of functional impairment (adjusted odds ratio [OR] 1.82, 95% confidence interval [CI] = [1.45, 2.29]), but not of dementia. Conclusion: Arthritis is associated with increased risk of functional impairment, but not with dementia after 11 years in older Mexicans.