Recent advances in upper limb prosthetics include sensory restoration techniques and osseointegration technology that introduce additional risks, higher costs, and longer periods of rehabilitation. To inform regulatory and clinical decision making, validated patient reported outcome measures are required to understand the relative benefits of these interventions. The Patient Experience Measure (PEM) was developed to quantify psychosocial outcomes for research studies on sensory-enabled upper limb prostheses. While the PEM was responsive to changes in prosthesis experience in prior studies, its psychometric properties had not been assessed. Here, the PEM was examined for structural validity and reliability across a large sample of people with upper limb loss (n = 677). The PEM was modified and tested in three phases: initial refinement and cognitive testing, pilot testing, and field testing. Exploratory factor analysis (EFA) was used to discover the underlying factor structure of the PEM items and confirmatory factor analysis (CFA) verified the structure. Rasch partial credit modeling evaluated monotonicity, fit, and magnitude of differential item functioning by age, sex, and prosthesis use for all scales. EFA resulted in a seven-factor solution that was reduced to the following six scales after CFA: social interaction, self-efficacy, embodiment, intuitiveness, wellbeing, and self-consciousness. After removal of two items during Rasch analyses, the overall model fit was acceptable (CFI = 0.973, TLI = 0.979, RMSEA = 0.038). The social interaction, self-efficacy and embodiment scales had strong person reliability (0.81, 0.80 and 0.77), Cronbach’s alpha (0.90, 0.80 and 0.71), and intraclass correlation coefficients (0.82, 0.85 and 0.74), respectively. The large sample size and use of contemporary measurement methods enabled identification of unidimensional constructs, differential item functioning by participant characteristics, and the rank ordering of the difficulty of each item in the scales. The PEM enables quantification of critical psychosocial impacts of advanced prosthetic technologies and provides a rigorous foundation for future studies of clinical and prosthetic interventions.