OBJECTIVES: To assess the suitability for use within economic evaluation of services targeted at older people of a commonly applied functional-status measure (the Barthel Index) by examining its convergent and discriminant validity when compared with a widely used generic preference-based instrument, the EuroQoL 5 dimensions 3 levels (EQ-5D-3L). METHODS: Data from a cross-section of 1,690 British older people were analysed. Convergent validity was investigated using spearman’s correlation, exploratory factor analysis (EFA), scatter plots, Krippendorff’s alpha, and modified Bland-Altman plots. Discriminant validity was examined using Kruskall Wallis tests, examination of ceiling effects and EFA. RESULTS: There was strong convergence between the BI total and EQ-5D-3L utility scores (spearman’s correlation = 0.51; Krippendorff’s alpha = 0.52 and only 6% of scores were outside the 95% limits of agreement in the Bland-Altman plots). Correlations between BI items and EQ-5D-3L dimensions measuring the same construct were weak to strong (0.05 ≤ absolute spearman’s correlation ≤ 0.57) and all in the hypothesised directions. In the exploratory factor analysis, some Barthel Index items cross-loaded onto the same factors as the EQ-5D-3L dimensions providing further evidence that the instruments were interrelated. Both instruments showed good discriminant validity and were able to discriminate between respondent characteristics and between underlying latent health constructs represented by the extracted factors from the EFA. CONCLUSIONS: The lack of perfect convergent validity between the instruments shows that the Barthel Index focuses more on physical functioning while the EQ-5D-3L measures much broader wellbeing concepts. The BartheI Index however demonstrated good discriminant validity comparable to that of the EQ-5D-3L and would therefore be equally useful for measuring subgroup differences within economic evaluation. In order to capture more physical-functioning-specific constructs not measured by the EQ-5D-3L, therefore, the BartheI Index can be used as complement to the former within cost-effectiveness analysis.