OBJECTIVES The aim of this chronological study was to elucidate the effects of socio-economic status (SES) and physical health on the long-term care (LTC) needs of a Japanese elderly population and to explore their causal relationships. METHODS A self-administered questionnaire was distributed to all residents aged 65 years and older of Tama City, Tokyo, in September 2001. A total of 13,195 completed questionnaires were returned, giving a response rate of 80.2 %. A follow-up study was done using the same questionnaire in 2004. Ultimately, 7,905 respondents were included in our analysis. Data analysis was performed using correlation analysis and structural equation modeling (SEM). For SEM, we used one observed variable (LTC needs in 2004) and three latent variables (SES in 2001 and physical health in both 2001 and 2004). RESULTS The data were well fit by the models, with a NFI of 0.980, CFI of 0.982, and RMSEA of 0.032. LTC needs were well explained by the three latent variables (R (2) = 0.70 and 0.66 for elderly men and women, respectively). Among all variables, physical health in 2004 was the strongest determinant of LTC needs, followed by physical health in 2001, and SES in 2001. Gender differences in the structural relationships were minor. CONCLUSIONS Our results indicate that good physical health directly contributes to reducing LTC needs among Japanese elderly. In addition, efforts to increase income and educational levels may help to decrease LTC needs by indirectly improving physical health.