Aim The first aim of the present study was to determine the construct validity of evaluating posture as a measure of physical function in elderly individuals. The second aim was to determine reference values for sternum inclination in elderly individuals when measured using a digitalized inclinometer. Methods We included 834 community‐dwelling elderly individuals (350 men and 484 women) in this study. We used a digital inclinometer for measuring sternum inclination angle. We evaluated physical functions, including muscle strength, static balance, gait ability and the functional mobility of our study participants. To assess the construct validity of sternum inclination in elderly people, Pearson's correlation coefficient between sternum inclination and participant characteristics was calculated. To determine a reference value of sternum inclination by age, P for trend was calculated. Results In men, the sternum inclination angle and sternum inclination index were significantly associated with all anthropometric measures, except static balance. In women, the sternum inclination index was significantly associated with all measures, whereas the sternum inclination angle was associated with all measures except for balance and the Timed Up and Go test. Trend of sternum inclination index by age was significant. Conclusions Our results show that the sternum inclination as a measure of physical function in elderly men and women has construct validity. We determined reference values for sternum inclination of which trend by age was considered. Geriatr Gerontol Int 2016; 16: 1068–1073.