Individuals with diabetes face a higher risk of mobility disabilities, frailty, and sarcopenia (physical health agility). Studies have shown an association between HbA1C levels and physical health agility status. There is less information available about the relationship with time in range (%) (TIR). The aim of this study was to evaluate the cross-sectional relationship between time in range % (TIR %) and physical health agility status among older adults with type 2 diabetes (aerobic capacity, gait speed, strength, balance, and frailty). A cross-sectional study was conducted among individuals with diabetes over the age of 60. Participants were equipped with a blinded continuous glucose monitor (CGM) system (Medtronic iPro™2 and CareLink™, Medtronic, Northridge, CA, USA)) for 1 week and underwent an elaborate physical functional assessment (physical health agility) at the beginning and end of that week. The relationship between various physical health agility indices and both TIR (%) and HbA1c was evaluated using linear regression, with adjustments made for age and sex. This analysis pertains to 139 individuals over the age of 60 with type 2 diabetes. After adjustment for age and sex, a 1% higher TIR (70-180 mg/dL) was associated with a 0.169 better score on aerobic capacity and endurance (-value = 0.023), 0.119 better score on muscle strength of the upper limb (-value = 0.039), 0.164 better score on dynamic balance (-value = 0.039), and 0.165 better score on the evaluation of fall risk and balance (-value = 0.037). In older individuals with diabetes, a higher percentage of time in range (TIR) is linked to better physical agility status indices. Future research is needed to determine whether glucose levels are simply a marker of disease severity or if there is a potential causal relationship.