Background: Social isolation has become an urgent public health concern in aging societies, yet the unique vulnerabilities of older men remain understudied. This study examined the association between functional dependency, assessed using activities of daily living (ADL) and instrumental activities of daily living (IADL), and social isolation among older men, and whether digital utilization moderates it. Methods: This cross-sectional secondary analysis used data from 3779 male participants aged 65 years and older (mean age ± standard deviation (SD), 74.0 ± 6.5 years) from the 2023 National Survey of Older Koreans. Social isolation was defined as nonparticipation in social activities. Functional dependency was assessed through ADL and IADL scales and categorized into four functional subdomains based on the International Classification of Functioning (ICF) framework: mobility, self-care, domestic life, and cognitive-social activities. Binary logistic regression and moderation analyses using the PROCESS macro were performed to identify the main and interaction effects between functional dependency and digital utilization. Results: Both ADL dependency (adjusted odds ratio (OR) = 1.86, 95% confidence interval (CI) = 1.40–2.48, p < 0.001) and IADL dependency (adjusted OR = 1.37, 95% CI = 1.10–1.69, p = 0.005) were significantly associated with social isolation. Among functional subdomains, mobility (adjusted OR = 2.02) and self-care (adjusted OR = 1.71) showed the strongest associations. Digital utilization demonstrated a significant moderating effect on the relationship between ADL dependency and social isolation (B = 0.52, p = 0.017), indicating that higher digital competence attenuated the negative impact of functional decline. Conclusions: Functional dependency, particularly in mobility and self-care, is a critical determinant of social isolation among older men. Digital utilization serves as a protective resource, buffering the risk of social isolation associated with physical decline. These findings underscore the need for integrated interventions that enhance physical independence and digital engagement.