BACKGROUND & AIMS: Muscle quality, including phase angle (PhA) and extracellular to intracellular water (ECW/ICW) ratio, assessed using multi-frequency bioelectrical impedance analysis (MF-BIA) to reflect the contractile components of the muscle, muscle cell mass, and membrane condition, is associated with health outcomes. However, its association with the incidence of disabilities remains unclear. The aim of this study was to examine the association between whole-body and segmental PhA, ECW/ICW ratio, and the incidence of functional disability compared to conventional muscle mass. METHODS: A total of 858 older adults aged ≥65 years without functional disability at baseline were followed up for 12 years. Functional disabilities were identified using the database of the Japanese Long-Term Care Insurance System. Segmental muscle quality was assessed using the raw parameters of MF-BIA, including segmental PhA and the ECW/ICW resistance ratio. For comparison, the appendicular lean mass index (ALMI) and legMI were obtained using MF-BIA. RESULTS: Functional disability was identified in 258 (30.1%) participants. Cox regression analysis showed that poorer leg PhA and ECW/ICW resistance ratios were significantly associated with a higher incidence of functional disability in both sexes, independent of covariates. A dose-response relationship indicated a higher risk for individuals with values below the median in the spline analysis. Conventional ALMI and legMI were not significantly associated with functional disability. CONCLUSIONS: PhA and ECW/ICW ratio, especially in the leg, is a better predictor of functional disability than muscle mass. Muscle quality by BIA may be a useful biomarker for screening for future disabilities.