Body fat changes in HIV-infected persons are associated with increased systemic inflammation and increased mortality. It is unknown whether lipodystrophy is also associated with declines in physical function. Between 2001 and 2003, 33 HIV-infected men with evidence of lipodystrophy (LIPO⁺), 23 HIV-infected men without lipodystrophy (LIPO⁻), and 33 seronegative men were recruited from the Multicenter AIDS Cohort Study (MACS) for the Body Composition substudy. Visceral adipose tissue (VAT) was assessed by quantitative computed tomography. Lean body mass (LBM) and extremity fat were measured by dual-energy x-ray absorptiometry. Insulin resistance was estimated by Homeostatic Model Assessment (HOMA). Serum interleukin (IL)-6, soluble tumor necrosis factor (TNF)-α receptors I and II (sTNFRI and sTNFRII), and highly sensitive C-reactive protein (hs-CRP) concentrations were quantified from archived serum samples. These measurements were correlated with grip strength measured in 2007 using linear regression. At the substudy visit, the LIPO⁺ group had higher HOMA, sTNFRI, sTNFRII, and IL-6 levels than the LIPO⁻ group. In 2007, the LIPO⁺ group had lower median grip strength than the LIPO⁻ group (34.4 vs. 42.7 kg, p=0.002). Multivariable analysis of HIV⁺ men showed older age, lower LBM, higher sTNFRII concentrations, and LIPO⁺ status [adjusted mean difference -4.9 kg (p=0.045)] at the substudy visit were independently associated with lower subsequent grip strength. Inflammation, lower LBM, and lipodystrophy in HIV-infected men were associated with lower subsequent grip strength. These findings suggest that inflammation may contribute to declines in functional performance, independent of age.