The purposes of this study were to describe the level of vision and hearing impairments, depression and functional capacity, among Korean institutionalized elderly and to examine the relation-ship between sensory impairments, depression, and functional capacity in these people. The final pupose was to test the cognitive function path model using sensory competencies as predictors. A convenience sample of thirty nine male and 90 female subjects with a mean age of 80.5 were the subjects of this study. The subjects were tested for cognitive function, and vision and hearing impairments. Physical function and social function were measured by observation of designated task performance by the subjects. Their level of de-pression was measured using a Geriatric Depression Scale administered through an interview. Individual subjective ratings of hearing and vision were marked by the subjects, on a ladder scale. The results of the study showed that 48.8% of the subjects had a hearing impairment, 63.5% had a vision impairement, and 36.4% had both a vision and hearing impairement. The four sensory groups (no sensory impairement, hearing impairement, vision impairement, hearing and vision impairement) were tested for differences in depression, physical function, social behavior and cognitive function. The only significant difference that was found was in cognitive function, between the no sensory impairement group and the hearing and vision impairement group(F=3.25, P<.05), Subjective ratings of hearing showed a significant correlation with cognitive function(r=.34, p<.001) and with social behavior(r=.31, p<.001). There was no correlation between subjective vision ratings and cognitive function or social behavior. However there was a significant correlation between vision and hearing(r=.49, p<.001). There was also a significant negative correlation between age and vision(r=-.21, p<.01) and between age and hear-ing(r=-.34, p<.001). There was a significant correlation between depression and physical function (r=-.32, p<.001) but there was no correlation between depression and cognitive function or social behavior. Based on the literature review and the result, this study, a path model of sensory competence-> cognitive function- >social behavior was developed and tested : Perceived vision and perceived hearing were the exogenous variahles and cognitive function and social behavior were the endogeneous variables in the model. The path analysis result demonstrated an accept-able fit (GFI=.997, AGFI=.972, X$^2$=.72 (p=.396), RMSR=.019) between the data and the model. There was a significant direct effect($eta$=.38) of perceived hearing on cognitive function. There was a significant direct effect ($eta$=.32) of cognitive function on social behavior. The total effect of hearing on social behavior was $eta$=.32 including the indirect effect ($eta$=.12) . However perceived vsion had little effect ($eta$=-.08) on cognitive function. The result of path analysis confirms that hearing levels influence cognitive function, and both hearing and cognitive function levels influence social behavior. However, vision has little effect on cognitive function or on social behavior. For the next study, a combined model of the pre viously developed environment - >depression- > physical and social function model, and the present cognitive function model, should be tested to further refine the functional capacity model. There also a need for longitudinal study of functional capacity and sencory competence in order to better understand how declining sensory competence influences functional capacity and how it effects in-creasing dependency and nursing needs in the elderly.