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AIMS: To present the prevalence of cognitive and functional impairment (CFI) in community-dwelling elderly subjects from the city of Sao Paulo. METHODS: The population was aged 60 years and older (n = 1,563; 68.7% women and 31.3% men) and lived in different socioeconomic areas. The following instruments were administered to the elderly: the Mini Mental State Examination and the Fuld Object Memory Evaluation. The Informant Questionnaire on Cognitive Decline in the Elderly and the Bayer-Activities of Daily Living scale were administered to an informant. RESULTS: The prevalence of CFI (n = 250) was 16% (95% confidence interval, CI: 14.2-17.8%) or 15.8% (95% CI: 13.8-17.8%). In regression models, the increase in the odds ratio (OR) of CFI was associated with age, for elderly individuals aged 75 years or older, illiterates or with 1-4 years of schooling, and with a history of stroke and diabetes mellitus. On the other hand, for subjects with a tumor history, the OR of CFI was significantly reduced. CONCLUSION: CFI was high and increased at older ages and in subjects with low education. Potentially changeable factors were identified (stroke and diabetes), and the possible 'protective effect' of tumor/cancer against CFI should be further investigated by longitudinal studies. [ABSTRACT FROM AUTHOR]