Regular musical activity as a complex multimodal lifestyle activity is proposed to be protective against age-related cognitive decline and Alzheimer’s disease. This cross-sectional study investigated the association and interplay between musical instrument playing during life, multi-domain cognitive abilities and brain morphology in older adults (OA) from the DZNE-Longitudinal Cognitive Impairment and Dementia Study (DELCODE) study. Participants reporting having played a musical instrument across three life periods (n = 70) were compared to controls without a history of musical instrument playing (n = 70), well-matched for reserve proxies of education, intelligence, socioeconomic status and physical activity. Participants with musical activity outperformed controls in global cognition, working memory, executive functions, language, and visuospatial abilities, with no effects seen for learning and memory. The musically active group had greater gray matter volume in the somatosensory area, but did not differ from controls in higher-order frontal, temporal, or hippocampal volumes. However, the association between gray matter volume in distributed frontal-to-temporal regions and cognitive abilities was enhanced in participants with musical activity compared to controls. We show that playing a musical instrument during life relates to better late-life cognitive abilities and greater brain capacities in OA. Musical activity may serve as a multimodal enrichment strategy that could help preserve cognitive and brain health in late life. Longitudinal and interventional studies are needed to support this notion.