BACKGROUND: The World Health Organization has proposed a model of healthy aging built around the concept of functional ability, comprising an individual's intrinsic capacity, the physical and social environment they occupy, and interactions between the two. However, these constructs have been poorly defined. We examined the structure of intrinsic capacity in a representative sample of the Chinese population aged 60 years and older and assessed its value in predicting declining performance in instrumental activities of daily living (IADLs) and activities of daily living (ADLs) using similar methods to a construct validation previously undertaken in an English cohort. METHODS: Deidentified data were accessed on 7 643 participants of the China Health and Retirement Longitudinal Study 2011 and 2013 waves. Incrementally related structural equation modeling was applied, including exploratory and confirmatory factor analysis, and path analysis. Multiple linear regression tested construct validity, and simple and serial mediation models assessed predictive validity. RESULTS: Factor loadings for the models showed a clear structure for intrinsic capacity: 1 general factor with 5 subfactors-locomotor, cognitive, psychological and sensory capacities, and vitality (reflecting underlying physiologic changes). Intrinsic capacity predicted declining performance in both IADLs (standardized coefficient (SE) -0.324 (0.02), p < .001) and ADLs (-0.227 (0.03), p < .001), after accounting for age, sex, education, wealth, and number of chronic diseases. Each characteristic was associated with intrinsic capacity, providing strong construct validity. CONCLUSIONS: Assessment of intrinsic capacity provides valuable information on an individual's subsequent functioning beyond that afforded by age, other personal factors, and multimorbidity.