The aim of this study is to determine the longitudinal association between age identity and physical functioning among urban Chinese older adults. We conducted secondary data analyses based on a sample of older adults aged 60 years and above who participated in both the 2006 and the 2010 Sample Survey on Aged Population in Urban/Rural China, which consisted of 5,788 urban community-dwelling older adults. A single-item measure of age identity was used to distinguish between old and youthful age identities (or the feeling of being old or not). Ordinary least regression analyses revealed that youthful age identity was significantly associated with better physical functioning, even when controlling for baseline sociodemographic and health variables as well as baseline physical functioning. This study provides new cross-cultural and longitudinal evidence of the protective function of youthful age identity in later life.