In the World Health Organization’s International Classification of Functioning, Disability and Health, participation restriction—the social and personal consequences of health conditions and their environment—is an important component of the concept of disability. The cross-sectional associations between perceived participation restriction and health, demographic and socio-economic factors were examined in 7,878 community-dwelling adults aged 50 years and over in North Staffordshire, UK who responded to a postal survey. All health conditions, impairments, activity limitations, demographic and socio-economic factors were associated with participation restriction, after adjusting for age and gender in a logistic regression analysis. Health and disability factors most strongly and independently associated with participation restriction in a multivariate analysis were the number of peripheral joint pains, the number of health conditions, cognitive impairment, anxiety, depression, and activity limitation. Perceived adequacy of income, employment status and occupational class were also significantly associated with participation restriction after adjusting for health and disability factors. In conclusion, perceived participation restriction is associated with a range of health and socio-economic factors. Although further prospective research is needed to identify the direction of causal association, these factors represent potential targets for intervention to prevent or reduce participation restriction in older adults in the community.