Conventionally, sarcopenia is defined by muscle mass and physical performance. We hypothesized that the disability caused by sarcopenia and sarcopenic obesity was related to the amount of adiposity or body weight bearing on a unit of muscle mass, or the adiposity to muscle ratio. We therefore examined whether this ratio could predict physical limitation by secondary analysis of the data in our previous study. We recruited 3,153 community-dwelling adults aged >65 years and their body composition was measured by dual-energy X-ray absorptiometry. Assessment of physical limitation was undertaken 4 years later. The relationship between baseline adiposity to muscle ratio and incident physical limitation was examined by logistic regression. In men, the adiposity to muscle ratios, namely total body fat to lower-limb muscle mass, total body fat to fat-free mass (FFM), and body weight to FFM, were predictive of physical limitation before and after adjustment for the covariates: age, Mini-mental Status Examination score, Geriatric Depression Scale score >8, and the diagnosis of chronic obstructive pulmonary disease, diabetes mellitus, hypertension, heart disease, and stroke (all p values < 0.001), when the total body fat to lower-limb muscle mass ratio was greater than or equal to 0.75. In women, throughout the entire range of that ratio, all three adiposity to muscle ratios were associated with physical limitation 4 years later both before and after adjustment for the same set of covariates (all p values < 0.05). Sarcopenia and sarcopenic obesity as measured by the body weight or adiposity bearing on a unit of muscle mass (the adiposity to muscle ratio) could predict incident or worsening physical limitation in older women across the entire range of the total body fat to lower-limb muscle mass ratio; and in older men when this ratio was equal to or greater than 0.75.