This article describes the development and validation of the Function Self-Efficacy Scale (FSES) for assessing the degree of confidence in self-functioning while facing decline in health and function (DHF). The FSES was evaluated in two studies of older Israelis, aged 75+ years. Data were collected by structured home interviews. Exploratory factor analyses conducted in both studies clearly revealed two underlying factors: emotion self-efficacy and action self-efficacy. Confirmatory factor analyses resulted in acceptable model fit criteria. The shortened final 13-item FSES had good internal consistency and satisfactory criterion and convergent validity. Multiple regression analyses, conducted to predict subjective well-being in each of the studies, showed that function self-efficacy had a positive and significant contribution to the explanation of well-being, while controlling for general self-efficacy, self-rated health, and sociodemographic variables. We propose that appropriate interventions can strengthen function self-efficacy, thus improving the well-being of elderly persons and their ability to cope with DHF.