Background: Older adults with advanced cancer are at increased risk of treatment-related toxicities, which can compromise physical performance and independence in daily functioning. However, studies evaluating the relationship of toxicities with functional capacity in this population are scarce. The aim of this analysis is to assess the effect of clinician-reported toxicities (CRTs) and patient-reported symptomatic toxicities (PRSTs) on physical performance and independence in daily functioning. Methods: This is a secondary analysis of GAP 70+ (NCT02054741, n = 718), a cluster randomized trial of older patients (70+ years) with advanced cancer initiating a new systemic therapy regimen. Impairments in physical performance [measured by Short Physical Performance Battery (SPPB)], and functional independence [measured by activities of daily living (ADL), and instrumental ADL (IADL)] were classified by established cut points. CRTs were collected by Common Terminology Criteria for Adverse Events (CTCAE) and PRSTs by Patient-Reported Outcome version of CTCAE (PRO-CTCAE). PRST grade was determined by severity of the items (0 = none, 1 = mild, 2 = moderate, 3 = severe, 4 = very severe). To count as a PRST event, symptom severity had to increase from pre-treatment level (baseline adjusted method). Patients without baseline impairment in SPPB, IADL, and ADL (n = 104, 308, 461, respectively), who provided data after baseline were included in the analysis. To assess the association of experiencing toxicity within 3 months and developing functional impairment within 6 months, generalized estimating equation (GEE) modeling was used. Models were adjusted for practice sites (random effect) and the study arm. Results: Patients were 70-96 years old (mean 77), 56% were male, and majority (87%) were white. Gastrointestinal (34%) and lung (25%) were the most common cancer types. During treatment, impairments in SPPB developed in 57.7% (60/104), in IADL 47.4% (146/308), and in ADL 31.0% (143/461). There was no association of CRT grade with developing impairment in SPPB (p = 0.92). A greater proportion of patients who experienced grade ≥ 3 CRT, compared to those with grade 2 and grade ≤ 1 CRT, developed impairment in IADL (54.4 vs 38.3 vs 25.2%, p = 0.01) and also in ADL (34.8 vs 23.9 vs 22.7%, p = 0.02). Patients who experienced grade ≥ 3 PRST, compared to those with grade 2 and grade ≤ 1 PRST, were more likely to developed impaired SPPB (73.6 vs 50.4 vs 27.8%, p = 0.01), IADL (50.8 vs 45.4 vs 31.5%, p = 0.20), and ADL (38.1 vs 18.5 vs 19.7%, p < 0.01). Conclusions: Assessing both patient- and clinician-reported toxicity provides insight into loss of independent functioning. Information patients provide about symptoms can help with early detection of decline in physical performance in older adults. These findings may help to guide interventions to mitigate functional decline. Clinical trial information: NCT02054741.