Sexual activity is important to older adults (65 +). Breathlessness affects about 25% of older adults but impact on sexual activity is unknown. We evaluated the relationships between breathlessness and sexual inactivity and self-reported health among older community-dwelling adults in the Australian Longitudinal Study of Ageing. Associations between self-reported breathlessness (hurrying on level ground or walking up a slight hill) at baseline, self-reported sexual activity, overall health and health compared to people of the same age were explored using logistic regression at baseline and 2 years, adjusted for potential confounders (age, sex, marital status, smoking status and co-morbidities). Of 798 participants (mean age 76.4 years [SD, 5.8] 65 to 103; 53% men, 73% married), 688 (86.2%) had 2-year follow-up data. People with breathlessness had higher prevalence and duration of sexual inactivity (77.7% vs. 65.6%; p < 0.001; 12 [IQR, 5-17] vs. 9.5 [IQR, 5-16] years; p = 0.043). Breathlessness was associated with more sexual inactivity, (adjusted OR 1.75; [95% CI] 1.24-2.45), worse health (adjusted OR 2.02; 1.53-2.67) and worse health compared to peers (adjusted OR 1.72; 1.25-2.38). Baseline breathlessness did not predict more sexual inactivity at 2 years. In conclusion, breathlessness contributes to sexual inactivity and worse perceived health in older adults, which calls for improved assessment and management.