Within the framework of the Evergreen project we examined how changes in several indicators of health and functioning and physical activity predicted a decline in self-assessments of health evaluated over a 5-year period in older people by two different measurements: self-rated health (SRH) and self-assessed change in health (SACH). The study group comprised all 75-year-old persons born in 1914 (N = 382) and living in Jyväskylä, a town in central Finland. At baseline in 1989, 91.6%, and at follow-up 5 years later in 1994, 87.3% of those eligible participated in the interview and 77.2 and 71.3%, respectively, in the examinations in the study centre, focusing on different domains of health and functional capacity. One-fifth of the subjects reported a deterioration in and one-fifth an improvement in SRH over the 5 years. The rest gave identical self-assessments of their health at baseline and at follow-up in response to the same question. Decline in SRH was associated with a decrease in physical activity and cognitive capacity. When asked directly about changes in their health (SACH), however, half the subjects said their health had declined. Negative SACH over the 5-year period was related to an increased number of chronic conditions, deterioration in functional performance and physical activity, and to the number of chronic conditions at baseline. We suggest that ageing people adapt to changes in their objective health and functional performance: the majority tend to assess their health as similar to or even better with increasing age despite an increase in chronic diseases and decline in functional performance. However, a negative SACH indicates that older people are realistic about these negative changes. These results support the assumption that the two subjective measurements of change in health are based on different criteria: assessment of current general health status tends to be based on inter-individual comparison, whereas assessment of change in health over a given time period may be based on intra-individual comparison. Physical activity seems to be an important factor when older people assess their health.