In this study, psychometric principles were used to develop an outcomes questionnaire capable of measuring health state domains important to patients with hand disorders. These domains were hypothesized to include (1) overall hand function, (2) activities of daily living (ADL), (3) pain, (4) work performance, (5) aesthetics, and (6) patient satisfaction with hand function. An initial pool of 100 questions was pilot-tested for clarity in 20 patients; following factor analysis, the number of questions was reduced to a 37-item Michigan Hand Outcomes Questionnaire (MHQ). The MHQ, along with the Short Form-12, a generic health status outcomes questionnaire, was then administered to 200 consecutive patients at a university-based hand surgery clinic and was subjected to reliability and validity testing. The mean time required to complete the questionnaire was 10 minutes (range, 7-20 minutes). Factor analysis supported the 6 hypothesized scales. Test-retest reliability using Spearman's correlation demonstrated substantial agreement, ranging from 0.81 for the aesthetics scale to 0.97 for the ADL scale. In testing for internal consistency, Cronbach's alphas ranged from 0.86 for the pain scale to 0.97 for the ADL scale (values >0.7 for Cronbach's alpha are considered a good internal consistency). Correlation between scales gave evidence of construct validity. In comparing similar scales in the MHQ and the Short Form-12, a moderate correlation (range, 0.54-0.79) for the ADL, work performance, and pain scales was found. In evaluating the discriminate validity of the aesthetics scale, a significant difference (p = .0012) was found between the aesthetics scores for patients with carpal tunnel syndrome and patients with rheumatoid arthritis. The MHQ is a reliable and valid instrument for measuring hand outcomes. It can be used in a clinic setting with minimal burden to patients. The questions in the MHQ have undergone rigorous psychometric testing, and the MHQ is a promising instrument for evaluation of outcomes following hand surgery.