Atypical sensory processing is prevalent across neurodevelopmental conditions and a key diagnostic criterion of autism spectrum disorder. It may have cascading effects on the development of adaptive functions. However, its unique contribution to adaptive functioning and the genetic/environmental influences on this link are unclear. In a clinically enriched twin sample (n = 289, 60 diagnosed with autism spectrum disorder), we investigated the associations between the quadrants of the Adult/Adolescent Sensory Profile (low registration, sensory sensitivity, sensation seeking, and sensation avoiding) and adaptive functioning. Associations were modeled across the cohort accounting for the effects of clinical diagnosis, IQ, sex and age, and within-twin pairs, additionally implicitly adjusting for familial factors. Furthermore, we explored interaction effects between atypical sensory processing and autism spectrum disorder diagnosis. Sensory sensitivity and sensation avoiding were associated with reduced adaptive functioning across individuals, but not within-twin pairs. An interaction effect was found between sensation seeking and autism spectrum disorder diagnosis, showing a negative association between sensation seeking and adaptive functioning only in individuals diagnosed with autism spectrum disorder. The results suggest that atypical sensory processing is associated with reduced adaptive functioning and that familial factors influence this link. In addition, sensation seeking behaviors might interfere with adaptive functioning specifically in individuals with autism spectrum disorder.