Background and Objectives: Information on socioeconomic inequalities in incidence of and recovery from disability is still scarce, as is information on socioeconomic inequalities in performance-based disability as compared to self-reported disability. This study aimed to estimate educational inequalities in the prevalence, incidence, and recovery of self-reported and performance-based disability in two European populations. Study Design and Setting: We analyzed data from two longitudinal studies on aging. At each wave, participants were asked to what degree they experienced difficulty with several functional tasks, and interviewers rated their performance on several tasks. Educational inequalities in both outcomes were expressed in terms of prevalence, incidence, and recovery ratios. Results: Educational inequalities in both prevalence and incidence of disability were observed. No large educational inequalities in recovery from disability could be demonstrated. Compared to inequalities in self-reports of disability, inequalities in performance-based disability were equally large in the Dutch study, but smaller in the Italian study. Conclusions: Inequalities in performance-based measures of disability stress the importance of the association of socioeconomic position with disability among older populations. Our results suggest that higher education serves to postpone or avoid disability, but provides less benefit when disability is already present. © 2005 Elsevier Inc. All rights reserved.