OBJECTIVES:Exercises that target muscle strength, balance, and gait prevent falls in older people. Moreover, exercise may reduce fear of falling by improving physical function. Many studies have examined the risk factors for falls and fear of falling separately. However, few studies have examined the associations between physical function, falls, and fear of falling simultaneously. This study aimed to identify the key physical functions influencing falls and fear of falling. DESIGN:Longitudinal observational study SETTING AND PARTICIPANTS: This study included 2,397 older adults (women: 82.8%, mean age: 74.3 ± 8.0 years) who participated in community-based physical exercise. METHODS:Physical functions such as muscle strength, balance, gait speed, and flexibility were measured regularly during the program. A questionnaire regarding falls and fear of falling was also administered simultaneously. Multilevel modeling was used to investigate the association between physical function and falls and fear of falling. RESULTS:The prevalence of falls and fear of falling at enrolment were 27.1% and 49.8%, respectively. Statistical analyses revealed that (1) falls were significantly associated with balance, age, fall history, fear of falling, and duration of participation; (2) fear of falling was significantly associated with muscle strength, balance, gait speed, age, and fall history. Long-term participation was significantly associated with an improvement in balance. CONCLUSIONS AND IMPLICATIONS:The risk factors for falls and fear of falling were different. Our research showed the importance of including balance training in all prevention programs.