The objective of this study is to study the associations of objectively defined hilliness with the prevalence and incidence of walking difficulties among community-dwelling older adults, and to explore whether behavioral, health, or socioeconomic factors would fully or partially explain these associations. Baseline interviews (n = 848, 75-90 years) on difficulties in walking 500 m, frequency of moving through the neighborhood, and perceived hilliness as a barrier to outdoor mobility were conducted. Two-year follow-up interviews (n = 551) on difficulties in walking 500 m were conducted among participants without baseline walking difficulties. Hilliness objectively defined as the mean slope in 500-m road network. Logistic regression showed that hilliness was associated with incident walking difficulties at the 2-year follow-up (odds ratio [OR] = 1.66, 95% confidence interval [CI] = [1.09, 2.51]) but not with the prevalence of walking difficulties at baseline. Adding behavioral, health, or socioeconomic factors to the models did not markedly change the results. Greater hilliness should be considered a risk factor for developing walking difficulties among older adults.