Few studies have investigated the factors related to the disability and physical function in degenerative lumbar spondylolisthesis using axially loaded magnetic resonance imaging (MRI). Therefore, we aimed to investigate the effect of axial loading on the morphology of the spine and the spinal canal in patients with degenerative spondylolisthesis of L4–5 and to correlate morphologic changes to their disability and physical functions. From March 2003 to January 2004, 32 consecutive cases (26 females, 6 males) with degenerative L4–5 spondylolisthesis, grade 1–2, intermittent claudication, and low back pain without sciatica were included in this study. All patients underwent unloaded and axially loaded MRI of the lumbo-sacral spine in supine position to elucidate the morphological findings and to measure the parameters of MRI, including disc height (DH), sagittal translation (ST), segmental angulation (SA), dural sac cross-sectional area (DCSA) at L4–5, and lumbar lordotic angles (LLA) at L1–5 between the unloaded and axially loaded condition. Each patient’s disability was evaluated by the Oswestry Disability Index (ODI) questionnaire, and physical functioning (PF) was evaluated by the Physical Function scale proposed by Stucki et al. (Spine 21:796–803, 1996). Three patients were excluded due to the presence of neurologic symptoms found with the axially loaded MRI. Finally, a total of 29 (5 males, 24 females) consecutive patients were included in this study. Comparisons and correlations were done to determine which parameters were critical to the patient’s disability and PF. The morphologies of the lumbar spine changed after axially loaded MRI. In six of our patients, we observed adjacent segment degeneration (4 L3–L4 and 2 L5–S1) coexisting with degenerative spondylolisthesis of L4–L5 under axially loaded MRI. The mean values of the SA under pre-load and post-load were 7.14° and 5.90° at L4–L5 (listhetic level), respectively. The mean values of the LLA under pre-load and post-load were 37.03° and 39.28°, respectively. There were significant correlations only between the ODI, PF, and the difference of SA, and between PF and the post-loaded LLA. The changes in SA (L4–L5) during axial loading were well correlated to the ODI and PF scores. In addition, the LLA (L1–L5) under axial loading was well correlated to the PF of patients with degenerative L4–L5 spondylolisthesis. We suggest that the angular instability of the intervertebral disc may play a more important role than neurological compression in the pathogenesis of disability in degenerative lumbar spondylolisthesis.