The aim was to develop a brief physical performance assessment tool that can be reliably used to detect physical impairment in older adults with and without mild dementia. Scores on the 9-item physical performance test (PPT) from non-demented participants were used to develop and validate the 4-item mini-PPT. The validated mini-PPT was then used to predict total PPT score and functional physical status in participants with mild dementia. Receiver operating curve (ROC) analyses were used to generate a cutoff score that classifies participants as functional vs. not functional. The setting was in the Alzheimer's Disease Research Center (Washington University). A total of 1199 participants met inclusion criteria: 574 non-demented participants, 436 with very mild dementia, measured by the clinical dementia rating (CDR)=0.5 and 189 with mild dementia (CDR=1). The mean age of the sample was 76.4 years, mean educational attainment was 14 years, 58% were women, and 11% were African American. A 4-item scale, the mini-PPT, was developed (based on the results of multiple regression analyses and clinical meaningfulness) that highly correlated with total PPT score (r=0.917, p<0.0001) in the non-demented sample. The correlation of the mini-PPT with total PPT was 0.90 among those with very mild, and 0.91 among those with mild dementia. Using the ROCs, a cutoff score of 12 correctly classified at least 85% of non-demented and demented persons. The 4-item mini-PPT is highly correlated with the 9-item PPT in non-demented and mildly demented persons. This brief tool may be useful in detecting early physical impairment in the clinical setting.