The functional capacity of two different non-institutionalized elderly populations and the resources available were compared in the same geographical area at 10 years' interval. The study shows that a 1.5-fold increase in the non-institutionalized population aged 75 or over combined with a fixed number of institutional beds in 10 years resulted in more disability among the elderly at home. The nursing home population at the latter point of time was older and showed a higher mortality, indicating increased pressure and selection to the nursing home. The first study comprised 82.8% and the second 89.2% of all community-living persons aged 75 or over. In 1988, the functional status of the aged living at home was significantly lower than in 1978, in 8 out of 12 functional activities of daily living (ADL). The Basic ADL Index decreased significantly both in men and in women, and mobility also deteriorated. The Instrumental ADL Index decreased significantly in men, while the Index was equally poor in women in both interviews. The poor functional status of the elderly in 1988 was accompanied by moving to the town centre and considerably improved housing standards. Home care services had more than doubled, and home nursing visits had also increased.