Balance in the elderly population is a major concern given the often catastrophic and disabling consequences of fall-related injuries. Structural and functional declines of the somatosensory system occur with aging and potentially contribute to postural instability in older adults. The objectives of this article are: (1) to discuss the evidence regarding age-related anatomical and physiological changes that occur in the peripheral proprioceptive and cutaneous systems, (2) to relate the basic science research to the current evidence regarding clinical changes associated with normal aging, and (3) to review the evidence regarding age-related proprioceptive and cutaneous clinical changes and relate it to research examining balance performance in older adults. The article is organized by an examination of the receptors responsible for activating afferent pathways (muscle spindle, golgi tendon organ, and articular and cutaneous receptors) and the corresponding sensory afferent fibers and neurons. It integrates basic science laboratory findings with clinical evidence suggesting that advanced aging results in a decline in cutaneous sensation and proprioception. The potential relationship between postural instability and sensory impairments in older adults also is discussed. Current laboratory and clinical evidence suggests that aging results in: (1) diverse and nonuniform declines in the morphology and physiological function of the various sensory structures examined, (2) preferential loss of distal large myelinated sensory fibers and receptors, and (3) impaired distal lower-extremity proprioception, vibration and discriminative touch, and balance. These findings provide foundational knowledge that emphasizes the importance of using reliable and valid sensory testing protocols for older adults and the need for further research that clarifies the relationship between sensory impairment and balance.