Abstract Background There is limited understanding regarding prospective associations of insomnia symptoms and trajectories with functional disability. We aimed to investigate the associations of insomnia symptoms and trajectories with functional disability. Method A total of 13 197 participants were eligible from the Health and Retirement Study. Insomnia symptoms included non-restorative sleep, difficulty initiating sleep, early morning awakening, and difficulty maintaining sleep. We also identified four distinct trajectories of insomnia symptoms: low, decreasing, increasing, and high insomnia symptoms. Functional status was assessed through activities of daily living (ADL) and instrumental activities of daily living (IADL). Results Participants experiencing one (HR, 1.21; 95% CI, 1.13–1.29), two (HR, 1.43; 95% CI, 1.29–1.57), or three to four (HR, 1.41; 95% CI, 1.25–1.60) insomnia symptoms had a higher risk of ADL disability than asymptomatic respondents. Similarly, participants with one or more insomnia symptoms had a higher risk of IADL disability. Furthermore, using the trajectory with low insomnia symptoms as the reference, decreasing insomnia symptoms (HR, 1.22; 95% CI, 1.12–1.34), increasing insomnia symptoms (HR, 1.21; 95% CI, 1.05–1.41), and high insomnia symptoms (HR, 1.36; 95% CI, 1.18–1.56) were all associated with an increased risk of ADL disability. Conclusion Both a single measurement and dynamic trajectory of insomnia symptoms are associated with the onset of ADL disability. Increased awareness and management of insomnia symptoms may contribute to the prevention of functional disability occurrence.