Background: The ability to engage in sexual activity and better cognitive functioning are both associated with better health. However, the association between cognitive functioning and sexual activity is understudied. Objective: To examine the association between cognitive functioning with sexual activity and physical tenderness among community-dwelling older adults. Methods: From the Rotterdam Study, cognitive impairment and sexual activity were assessed in 4,201 community-dwelling, 60+ year olds between 2008 and 2014 in the Netherlands. Mild cognitive impairment (MCI) was based upon subjective complaints related to age and education-adjusted test scores. Mini-Mental State Examination (MMSE) impairment was defined by a score of < 26. Sexual activity and physical tenderness (e.g., fondling or kissing) in the last 6 months were assessed at an interview. Analyses were stratified by gender and partner status, with prevalence rates for the “no impairment” categories weighted based on age from the cognitive impairment categories. Inter-rater reliability was examined utilising 74 cohabiting couples of opposite gender. Results: It was found that 14% were categorised as having cognitive impairment, and < 1% as dementia (excluded from subsequent analyses). There was strong evidence that the odds of engaging in physical tenderness (observed through MMSE < 26, OR 2.14, 95% CI 1.32–3.48, p = 0.002) and sexual activity (MCI, OR 2.36, 95% CI 1.35–4.12, p = 0.003) among partnered females with no impairment was twice that observed among cognitively impaired partnered females. There was weak evidence that the odds of engaging in physical tenderness (MMSE < 26, OR 1.59, 95% CI 1.04–2.42, p = 0.03) and sexual activity (MMSE < 26, OR 1.51, 95% CI 1.02–2.24, p = 0.04) among partnered males with no impairment was 50% greater than observed among cognitively impaired partnered males. The associations between cognitive functioning and physical tenderness continued to remain after adjustment for physical function, diabetes, cardiovascular disease and cancer. There was no clear evidence of a difference between amnestic and non-amnestic MCI for sexual behaviour. There was moderate to substantial agreement among the coupled adults who had 1 partner categorised with MCI. Conclusion: Having no cognitive impairment was associated with more engagement in sexual activity and physical tenderness among community-dwelling older adults. Sexuality is an important aspect of active aging and our findings illustrate a potential barrier to maintaining or instigating intimate relationships as we age. Longitudinal analyses are required to explore the direction of effect.