Abstract Background and Objectives The rapidly aging global population brought increasing attention to the concepts of functional capacity (FC) and functional ability (FA), key indicators of health and well-being in older adults. Despite their importance, FC and FA are inconsistently defined, with varying dimensions and measurement approaches. This scoping review clarifies these concepts by summarizing current definitions, mapping their dimensions, identifying assessment tools, and proposing precise operational definitions to guide future research. Research Design and Methods In this scoping review, a search was conducted across PubMed, Embase, and PsycInfo, supplemented by snowball searches of reference lists. Included were studies involving adults aged 60 and older, published after 2015. Definitions, dimensions, and measurement tools of FC and FA were extracted and analyzed. Results Among 85 included studies, only 16 explicitly defined FC or FA, with significant variability. Four primary dimensions emerged: physical, mental, social, and activities of daily living (ADL). FC predominantly emphasized physical health, while FA focused on ADL independence. Measurement tools were highly diverse, with 97 instruments identified, yet limited adoption of multidimensional approaches. Discussion and Implications The findings highlight the need for standardized definitions and comprehensive, multidimensional assessments of FC and FA. Adopting the International Classification of Functioning, Disability and Health (ICF) framework offers a potential solution to align research and practice. Standardized, holistic approaches to defining and measuring FC and FA are essential to advance research, guide clinical interventions, and support aging-related policy development worldwide.