Functional status is frequently discussed as a key element of nursing practice and a critical outcome criterion, and yet this phenomenon is poorly understood. Many important questions have not been addressed, in part because terms such as functional status, functional ability, health status, and quality of life have been used interchangeably. Failure to clearly outline the terminology and refine the definitions has placed us on a functional status merry-go-round that inhibits scientific progress in this area. The purpose of this article is to introduce an analytical framework for the study of functional status. Four dimensions of functional status are proposed: functional capacity, performance, reserve, and capacity utilization. These terms are defined and clarified through a discussion emphasizing the consequences for measurement, intervention, and clinical trials. The article concludes by illustrating the utility of the framework in recognizing and appreciating functional status trajectory patterns in aging and chronic illness.