Aim The present study examined the association between self‐reported quality of sleep (QOS) and physical function in community‐dwelling young‐old adults. Methods This cross‐sectional study included 737 community‐dwelling older adults aged 60 years and older (498 women, 239 men); age 68.3 ± 5.2 years (range 60–79 years). Participants completed a self‐administered questionnaire, which included the Pittsburgh Sleep Quality Index, as well as information regarding sociodemographic characteristics, physical activity, smoking and alcohol consumption. The χ2‐test was used to compare categorical variables stratified by QOS, and the unpaired t‐test was used for continuous variables for men and women separately. Furthermore, logistic regression analyses were carried out to verify the association between QOS and physical function measures. Results The unpaired t‐test showed a significant difference ((P < 0.05) in the Timed Up and Go test and physical strength outcomes, which included: handgrip, quadriceps setting, knee extension and hip flexion strength between the good QOS and poor QOS groups among the men. However, the t‐test results for physical function outcomes did not show a significant difference among the women. In the logistic regression model, after adjusting for age, sex and potential confounding factors, handgrip strength remained significantly associated with QOS (OR 0.96, 95% CI 0.92–1.00). Conclusion QOS was associated with physical function in young‐old adults; those with good QOS were especially more likely to possess stronger grip strengths; however, further research is required to identify the temporal relationship. Geriatr Gerontol Int 2017; ••: ••–••.