BACKGROUND: Footwear characteristics have been shown to influence balance in older people; however, the relationship between footwear and falls is unclear. OBJECTIVE: To determine the relationships between footwear characteristics and the risk of indoor and outdoor falls in older people. METHODS: Footwear characteristics (shoe type, heel height, heel counter height, heel width, critical tipping angle, method of fixation, heel counter stiffness, sole rigidity and flexion point, tread pattern and sole hardness) were assessed in 176 people (56 men and 120 women) aged 62-96 (mean age 80.1, SD 6.4) residing in a retirement village. Falls were recorded over a 12-month follow-up period and comparisons made between fallers and non-fallers. RESULTS: 50 participants (29%) fell indoors and 36 (21%) fell outdoors. After controlling for age, gender, demographic characteristics, medication use, physiological falls risk factors and foot problems, those who fell indoors were more likely to go barefoot or wear socks inside the home (OR = 13.74; 95% CI 3.88-48.61, p < 0.01). However, there were no significant differences in indoor or outdoor footwear characteristics between fallers and non-fallers. Five indoor fallers (10%) and three outdoor fallers (8%) stated that their shoes contributed to their fall. CONCLUSION: Footwear characteristics were not significantly associated with falls either inside or outside the home. Risk of falling indoors was associated with going barefoot or wearing socks. Older people at risk of falling should therefore be advised to wear shoes indoors where possible.