The loss of a hand has many psychosocial repercussions. While advanced multi-articulated prostheses can improve function, without sensation, they cannot restore the full experience and connection of a hand. Direct nerve interfaces can restore naturalistic sensation to amputees. Our sensory restoration system produced tactile and proprioceptive sensations on the hand via neural stimulation through chronically implanted electrodes. In this study, upper limb amputees used a sensory-enabled prosthesis in their homes and communities, autonomously and unconstrained to specific tasks. These real-life conditions enabled us to study the impact of sensation on prosthetic usage, functional performance, and psychosocial experience. We found that sensory feedback fundamentally altered the way participants used their prosthesis, transforming it from a sporadically-used tool into a readily and frequently-used hand. Functional performance with sensation improved following extended daily use. Restored sensation improved a wide range of psychosocial factors, including self-efficacy, prosthetic embodiment, self-image, social interaction, and quality of life. This study demonstrates that daily use of a sensory-enabled prosthesis restores the holistic experience of having a hand and more fully reconnects amputees with the world.