Aim As the elderly population is increasing, the prediction and prevention of functional decline in older adults are of great concern. The present study aimed to evaluate whether poor self‐reported health status (SRHS) could predict functional decline after 2 years in the elderly population. Methods Data from the Korean Longitudinal Study of Aging panel, a national representative sample of aging Koreans, were used. Participants of the investigation were the elderly population aged 65 years or more without disability in carrying out activities of daily living (ADL) at baseline. The survey asked respondents about their subjective health status. Setting the respondents who stated their health status as “very good” or “good” as the reference group, multivariable logistic regression analysis was carried out to compare functional decline according to the baseline SRHS. Results A total of 2824 participants were included in the analysis. Among them, 138 (4.9 %) reported functional decline of at least one of the seven ADL components after 2 years. In multivariable logistic regression analysis, SRHS was significantly associated with subsequent functional decline in respondents who chose “Bad” (odds ratio 3.32, 95% confidence interval 1.71–6.44) or “Very bad” (OR 4.75, 95% CI 2.12–10.66). Furthermore, poorer SRHS was significantly associated with subsequent impairment in each ADL component. Also, SRHS predicted overall subsequent impairment in the instrumental ADL. Conclusions SRHS predicted functional decline after 2 years in older adults without baseline disabilities. SRHS can be a good predictor of future functional decline in the elderly population. Geriatr Gerontol Int 2017; 17: 885–892.