To gain insight into the mechanical determinants of walking energetics, we investigated the effects of aging and arm swing on the metabolic cost of stabilization. We tested two hypotheses: (1) elderly adults consume more metabolic energy during walking than young adults because they consume more metabolic energy for lateral stabilization, and (2) arm swing reduces the metabolic cost of stabilization during walking in young and elderly adults. To test these hypotheses, we provided external lateral stabilization by applying bilateral forces (10% body weight) to a waist belt via elastic cords while young and elderly subjects walked at 1.3m/s on a motorized treadmill with arm swing and with no arm swing. We found that the external stabilizer reduced the net rate of metabolic energy consumption to a similar extent in elderly and young subjects. This reduction was greater (6-7%) when subjects walked with no arm swing than when they walked normally (3-4%). When young or elderly subjects eliminated arm swing while walking with no external stabilization, net metabolic power increased by 5-6%. We conclude that the greater metabolic cost of walking in elderly adults is not caused by a greater cost of lateral stabilization. Moreover, arm swing reduces the metabolic cost of walking in both young and elderly adults likely by contributing to stability.