Genetic and environmental influences on predictors of decline in daily functioning, including forced expiratory volume in 1 s (FEV1), forced vital capacity (FVC), handgrip, and five-times-sit-to-stand test (FTSST), have not been addressed in the aging Chinese population. We performed classical twin modeling on FEV1, FVC, handgrip, and FTSST in 379 twin pairs (240 MZ and 139 DZ) with median age of 50 years (40–80 years). Data were analyzed by fitting univariate and bivariate twin models to estimate the genetic and environmental influences on these measures of physical function. Heritability was moderate for FEV1, handgrip, and FTSST (55–60%) but insignificant for FVC. Only FVC showed moderate control, with shared environmental factors accounting for about 50% of the total variance. In contrast, all measures of pulmonary function and muscle strength showed modest influences from the unique environment (40–50%). Bivariate analysis showed highly positive genetic correlations between FEV1 and FVC (rG = 1.00), and moderately negative genetic correlations between FTSST and FEV1 (rG = −0.33) and FVC (rG = −0.42). FEV1 and FVC, as well as FEV1 and handgrip, displayed high common environmental correlations (rC = 1.00), and there were moderate correlations between FVC and handgrip (rC = 0.44). FEV1 and FVC showed high unique environmental correlations (rE = 0.76) and low correlations between handgrip and FEV1 (rE = 0.17), FVC (rE = 0.14), and FTSST (rE = −0.13) with positive or negative direction. We conclude that genetic factors contribute significantly to the individual differences in common indicators of daily functioning (FEV1, handgrip, and FTSST). FEV1 and FVC were genetically and environmentally correlated. Pulmonary function and FTSST may share similar sets of genes but in the negative direction. Pulmonary function and muscle strength may have a shared environmental background.