Background Mexican Americans comprise the most rapidly growing segment of the older US population and are reported to have poorer functional health than European Americans, but few studies have examined factors contributing to ethnic differences in walking speed between Mexican Americans and European Americans. Objective The purpose of this study was to examine factors that contribute to walking speed and observed ethnic differences in walking speed in older Mexican Americans and European Americans using the disablement process model (DPM) as a guide. Design This was an observational, cross-sectional study. Methods Participants were 703 Mexican American and European American older adults (aged 65 years and older) who completed the baseline examination of the San Antonio Longitudinal Study of Aging (SALSA). Hierarchical regression models were performed to identify the contribution of contextual, lifestyle/anthropometric, disease, and impairment variables to walking speed and to ethnic differences in walking speed. Results The ethic difference in unadjusted mean walking speed (Mexican Americans=1.17 m/s, European Americans=1.29 m/s) was fully explained by adjustment for contextual (ie, age, sex, education, income) and lifestyle/anthropometric (ie, body mass index, height, physical activity) variables; adjusted mean walking speed in both ethnic groups was 1.23 m/s. Contextual variables explained 20.3% of the variance in walking speed, and lifestyle/anthropometric variables explained an additional 8.4%. Diseases (ie, diabetes, stroke, chronic obstructive pulmonary disease) explained an additional 1.9% of the variance in walking speed; impairments (ie, FEV1, upper leg pain, and lower extremity strength and range of motion) contributed an additional 5.5%. Thus, both nonmodifiable (ie, contextual, height) and modifiable (ie, impairments, body mass index, physical activity) factors contributed to walking speed in older Mexican Americans and European Americans. Limitations The study was conducted in a single geographic area and included only Mexican American Hispanic individuals. Conclusions Walking speed in older Mexican Americans and European Americans is influenced by modifiable and nonmodifiable factors, underscoring the importance of the DPM framework, which incorporates both factors into the physical therapist patient/client management process.