We examined the American Medical Association's Guides to the Evaluation of Permanent Impairment rating schedule to determine whether this guide provided a reliable and valid assessment of hand impairment. A sample of 118 patients with permanent hand impairment was assessed using the guide. In addition, each patient underwent tests of finger dexterity, hand strength, hand-eye coordination, and the rate of manipulation. The reliability, based on the correlation between the two raters, was 0.75. For the injured hand, psychomotor test scores were highly correlated with the rating of permanent impairment in all cases. These differences were statistically significant for approximately two thirds of the cases. The guide's ratings showed both substantial reliability and accuracy with the various tests of hand function.