There is increasing evidence of the health benefits of exposure to natural environments, including green and blue spaces. The association with physical functioning and its decline at older age remains to be explored. The aim of the present study was to investigate the longitudinal association between the natural environment and the decline in physical functioning in older adults. We based our analyses on three follow-ups (2002-2013) of the Whitehall II study, including 5759 participants (aged 50 to 74 years at baseline) in the UK. Exposure to natural environments was assessed at each follow-up as (1) residential surrounding greenness across buffers of 500 and 1000 m around the participants' address using satellite-based indices of greenness (Enhanced Vegetation Index (EVI) and Normalized Difference Vegetation Index (NDVI)) and (2) the distance from home to the nearest natural environment, separately for green and blue spaces, using a land cover map. Physical functioning was characterized by walking speed, measured three times, and grip strength, measured twice. Linear mixed effects models were used to quantify the impact of green and blue space on physical functioning trajectories, controlled for relevant covariates. We found higher residential surrounding greenness (EVI and NDVI) to be associated with slower 10-year decline in walking speed. Furthermore, proximity to natural environments (green and blue spaces combined) was associated with slower decline in walking speed and grip strength. We observed stronger associations between distance to natural environments and decline in physical functioning in areas with higher compared to lower area-level deprivation. However, no association was observed with distance to green or blue spaces separately. The associations with decline in physical functioning were partially mediated by social functioning and mental health. Our results suggest that higher residential surrounding greenness and living closer to natural environments contribute to better physical functioning at older ages.