Performance-based measures may be useful in quantifying functional impairment associated with bipolar disorder, particularly among older adults. Among 30 outpatients with bipolar disorder and 31 normal comparison subjects (NCs), we administered the UCSD Performance-Based Skills Assessment (UPSA) and 2 subjective measures of functioning. The UPSA simulates real-world everyday tasks, such as financial management. We compared UPSA scores between groups and, within the bipolar group, examined associations between UPSA scores and subjective functioning, cognitive functioning, and depressive, and manic symptoms. By large effect sizes, the bipolar disorder group had lower scores on the UPSA and its subscales compared with NCs. Within the bipolar group, UPSA scores correlated strongly with Quality of Well-Being Scale but not SF-36 scores, and the UPSA was not related to depressive or manic symptoms, but was associated with cognitive functioning. Given its relative independence from symptoms, the UPSA may be useful in gauging the effectiveness of rehabilitation for bipolar disorder.