Objectives To examine the self-reported level of work ability among female employees and the relationship between work ability and demographic characteristics, physical health, mental health, and various psychosocial and organizational work environment factors. Methods Participants were 597 female employees with an average age of 43 years from urban and rural areas in Norway. Trained personnel performed a structured interview to measure demographic variables, physical health, and characteristics of the working environment. Mental health was assessed using the 25-item version of the Hopkins Symptoms Checklist (HSCL-25). Work ability was assessed using a question from the Graded Reduced Work Ability Scale. Results Of the 597 female employees, 8.9% reported an extremely or very reduced ability to work. Twenty-four percent reported poor physical health and 21.9% reported mental distress (≥ 1.55 HSCL-25 cut-off). Women, who reported moderately and severely reduced work ability, did not differ a lot. Moderately reduced work ability increased with age and was associated with physical and mental health. Severely reduced work ability was strongly associated only with physical health and with unskilled occupation. Of eight work environment variables, only three yielded significant associations with work ability, and these associations disappeared after adjustment in the multivariate analysis. Conclusion Results indicate that ageing, in addition to poor self-reported physical health and unskilled work, were the strongest factors associated with reduced work ability among female employees. Impact of work environment in general was visible only in univariate analysis.