IMPORTANCE: Impairments in vision or hearing are common and have been independently linked to higher risk of dementia in older adults. There is a limited understanding of the prevalence of concurrent functional vision and hearing impairment (dual sensory impairment) and its contribution to dementia risk. OBJECTIVE: To examine the age-specific prevalence of functional dual sensory impairment among older adults, and to investigate the cross-sectional and 7-year longitudinal associations between functional dual sensory impairment and dementia. DESIGN, SETTING, AND PARTICIPANTS: This cohort study of 7562 older adults used data from the US National Health and Aging Trends Study (NHATS), a nationally representative cohort study of community-dwelling, Medicare beneficiaries aged 65 years and older in the US. Participants in the study with complete data on hearing, vision, and dementia were included in analysis. Data were collected between 2011 and 2018, and between March 2018 and May 2020. EXPOSURES: Self-reported functional sensory impairments (ie, no sensory impairment, functional vision impairment only, functional hearing impairment only, and functional dual sensory impairment). MAIN OUTCOMES AND MEASURES: Age-specific prevalence of functional sensory impairments was calculated. Generalized linear regression with a complementary log-log link and a discrete time proportional hazards model with a complementary log-log link were used to assess the cross-sectional and 7-year longitudinal hazard of dementia. RESULTS: Of 7562 participants, 3073 (40.7%) were ages 80 years or older and 4411 (58.3%) were women. Overall, 5.4% (95% CI, 4.7%-6.1%) of participants reported functional vision impairment only, 18.9% (95% CI, 18.9%-17.8%) reported functional hearing impairment only, and 3.1% (95% CI, 2.7%-3.5%) reported functional dual sensory impairment (prevalence estimates are weighted). Participants reporting sensory impairments were older (no impairment: age ≥90 years, 2.12% [95% CI, 1.79%-2.46%] vs functional dual sensory impairment: age ≥90 years, 20.06% [95% CI, 16.02%-24.10%]), had lower education (no impairment: <high school, 19.05% [95% CI, 17.27%-20.83%] vs functional dual sensory impairment: <high school, 46.15% [95% CI, 38.38%-53.92%]), and greater disease burden (eg, heart disease: no impairment, 15.30% [95% CI, 14.04%-16.55%] vs functional dual sensory impairment, 25.49% [95% CI, 19.96%-31.02%]). Compared with no impairment, functional vision impairment (adjusted hazard ratio [aHR], 1.89; 95% CI, 1.57-2.28), functional hearing impairment (aHR, 1.14; 95% CI, 1.00-1.31), and functional dual sensory impairment (aHR, 2.00; 95% CI, 1.57-2.53) were associated with a higher cross-sectional hazard of dementia. Over 7 years, functional vision impairment (aHR, 1.40; 95% CI, 1.12-1.74), functional hearing impairment (aHR, 1.09; 95% CI, 0.95-1.24), and functional dual sensory impairment (aHR, 1.50; 95% CI, 1.12-2.02) were associated with a higher hazard of incident dementia compared with no impairment. CONCLUSIONS AND RELEVANCE: In this cohort study of US Medicare beneficiaries, dual sensory impairment was prevalent in older adults and associated with increased risk of dementia. These findings suggest that sensory rehabilitative interventions for multiple impairments may be an additional resource in efforts to reduce dementia risk.