BACKGROUND AND OBJECTIVE. Item response bias (also called differential item functioning, DIF) in Instrumental Activities of Daily Living (IADL) occurs when members of different groups possessing the same disability level do not have the same probability of responding positively for a given item(s). This study aimed to identify the extent of DIF by gender, age, ethnicity and dementia groups in IADL estimates in Asian (Chinese, Malay and Indian) elderly subjects. METHODS. Data of the 2003 National Mental Health Survey were analyzed from 1072 non-institutionalized elderly subjects using multiple indicator–multiple cause latent variable (MIMIC) modeling RESULTS Given the same functional level, older elderly were less likely to report receiving help with preparing meals; men were more likely to report receiving help with preparing meals, doing laundry, and taking medication; Malays were more likely to report receiving help with using telephone; and demented elderly were more likely to report receiving help with using telephone, managing money, taking medications, and ‘getting around'. The impact of DIF on group differences was highest for gender (54.0%), ethnicity (42.9%), dementia (14.7%) and age (2.4%). CONCLUSION. Item-response bias in IADL estimates by gender, age, ethnicity and dementia should be considered in direct comparisons of disability status among population groups.