(1) Background: Cervical proprioception maintains head orientation in space and contributes to maintaining bodily balance. Evaluating cervical proprioception in elderly individuals with chronic neck pain (CNP) and understanding how pain intensity mediates the relationship between proprioception and functional balance helps formulate treatment strategies for this population. The objectives of this study are to (a) compare the cervical proprioception and functional balance between CNP and asymptomatic, (b) investigate the relationship between cervical proprioception and functional balance ability in CNP individuals and (c) mediation effect of chronic pain on the relationship between cervical proprioception and functional balance tests (2) Methods: This cross-sectional comparative study recruited 60 elderly individuals with a diagnosis of CNP (mean age: 66.40 years) and 60 asymptomatic (mean age: 66.42 years). The cervical proprioception is measured using the target head repositing technique. The subjects were asked to close their eyes and reposition their head actively to the target position from the neutral position, and the reposition accuracy is estimated as joint position errors (JPE) in degrees. The cervical proprioception was measured in the directions of flexion, extension, and left and right rotation. The functional balance was assessed using the berg balance test (BBS) score and timed-up-and-go (TUG) test in seconds. (3) Results: The elderly individuals with CNP had increased cervical JPE compared to the asymptomatic group (p < 0.001) in all the directions tested, indicating that cervical proprioception is impaired in CNP patients. Moreover, the CNP individual functional balance is significantly impaired (p < 0.001) compared to asymptomatic. The BBS test scores were lower, and the TUG scores were higher in the CNP group. In CNP individuals, the cervical JPE showed a significant correlation with the BBS test scores (r = -0.672 to -0.732, p < 0.001) and TUG scores (r = 0.328 to -0.414, p < 0.001). (4) Conclusions: Cervical proprioception and functional balance are impaired in elderly individuals with CNP. Physical therapists and rehabilitation professionals may consider these factors during the evaluation and development of treatment strategies in elderly adults with CNP.

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