The overall purpose of this study is to investigate the physical performance of early postmenopausal Caucasian women during a 12-month weight reduction program. Additionally, the relationships between body composition (bone, fat and lean mass) and physical performance during that period is explored. A total of 97 participants aged 56.0(±4.3) years old with an average BMI of 30.3(±3.8) kg/m2 were included in this study. Of those, 66 (68 %) and 55 (57 %) participants completed the 6-month and 12-month interventions, respectively. The participants followed prescribed energy-restricted meal plans and were divided into three groups based on calcium and vitamin D intake: hypocaloric diet with calcium+vitamin D supplements (1260 mg/day+800 IU/day), hypocaloric diet with placebo or hypocaloric diet with 5-6 servings of low-fat dairy products. Physical performance measures including handgrip strength, 8-meter walking speed, one leg stance (OLS), timed 8-foot get-up and go test (TGUG) and chair sit-to-stand test (STS) and iDXA scan for body composition and bone mineral density (BMD) were performed at baseline, month 6 and month 12. Fasting blood were drawn to analyze the concentration of serum 25 hydroxyvitamin D (25OHD) by using ELISA. At baseline, a higher percentage of body fat was correlated with poorer physical performance on non-dominant OLS, TGUG, walking speed and STS. Multiple regression analyses controlling for age, weight, height, calcium intake, serum 25OHD, physical activity and smoking status revealed that having more leg fat (%) was related to poorer performance on OLS, TGUG, walking speed and STS indicating this relationship was site specific. In addition, handgrip strength was positively related to total lean mass. Only forearm BMD (radius 33%) was positively correlated with handgrip strength among various skeletal sites. During the 12-month intervention, participants decreased in weight from 81.4±12.1 kg (BMI of 30.2±3.7 kg/m2) to 78.4±13.4 kg (BMI of 29.1±4.3 kg/m2, p<0.001). Among physical performance measures, walking speed and chair STS were significantly improved. The results of linear mixed models showed that the decrease in weight and percentage of fat were related to the improvement in all physical performance measures over time. The change in the amount of lean mass resulted in a positive relationship with the change in the handgrip strength, OLS, walking speed and STS over time. However, no significant relationship was observed between BMD and physical performance measures. Overall, the percentage of fat and its change with weight loss were the most significant predictors of physical performance and its change in overweight/obese postmenopausal women. Even the modest weight loss resulted in improvement of some of the physical performance measures in this cohort of overweight/obese early postmenopausal women.