Despite considerable research examining the influence of socioeconomic status on health, few studies have considered this relationship as it pertains to older adults in non-Western societies. We attempt to ascertain the influence of education on changes in physical functioning in a rapidly developing country. Data come from the 1989 Survey of Health and Living Status of the Elderly in Taiwan and a follow-up interview in 1993 (N = 4,049, age = 60+). Individuals are conceptualized to be in a state of functional independence or functional limitation at the time of origin, based on their ability to perform three physical functioning tasks. The outcome at the follow-up interview is categorized as functionally independent, limited, or dead, allowing for six probabilities, one from each state of origin to each outcome. These are calculated using a multinomial logit model, controlling for other factors often thought to be associated with health transitions. High levels of educational attainment result in a decreased incidence of functional limitation for those originating in a state of independence. Contrary to expectations, however, education has little influence on those who originate functionally limited. Thus, higher education plays a substantial role in primary prevention of morbidity, delaying the onset of disability, but other factors are more important once limitations begin. We speculate on the reasons behind these findings, including that the results may be culturally dependent.