Environmental context is widely recognized as a critical influence on older adults' well-being. Disorderly conditions, in particular, are believed to threaten health and to potentially accelerate functional decline. The current article develops a layered context approach that integrates neighborhood and household disorder and considers their impact on various status groups of older adults in American society. Using two waves of the National Social Life, Health, and Aging Project (n = 1608), we assess longitudinal fall risk and the incidence of functional limitations as a function of layered environmental risk constructs measured systematically by trained observers. Results indicate a weak/moderate correlation between neighborhood and household disorder (r = 0.29). In multivariate analysis, disorderly household conditions raise the risk of falling, particularly for older adults with at least a high school level of education. Neighborhood disorder, moreover, was associated with incident functional limitations only among the most educated seniors. Together, these findings highlight the complex interplay between older people and their environments and the importance of investigating differential vulnerability in the effects of layered contextual risk. (C) 2014 Elsevier Ltd. All rights reserved.