The Functional Status Examination (FSE) is a new measure designed to evaluate change in activities of everyday life as a function of an event or illness, including traumatic brain injury. The measure covers physical, social, and psychological domains. The FSE is based on a structured interview and includes levels of functioning that accommodate the full spectrum of possible outcomes, from death through recovery to preinjury functioning. Based on 133 prospectively studied patients with moderate to severe traumatic brain injury, the FSE has favorable psychometric properties including good test-retest reliability (r = 0.80) and close correspondence of assessments provided by the patient and their significant other (SO; r = 0.80). The FSE correlated significantly with each of three severity indices with closest relationships occurring between the FSE assessed by the SO and posttraumatic amnesia (r = 0.76). The FSE assessed by the SO was significantly (p < 0.05) more closely related to each severity index than the Glasgow Outcome Scale (GOS) or Sickness Impact Profile and, for two of the three indices, than the SF-36. All measures showed significant change from 1 to 6 months after injury with the FSE showing the largest effect sizes. The FSE is significantly related to important constructs such as family burden, SO depression, and sacrifices the family makes, as well as overall indices of recovery and satisfaction with level of functioning. The latter relationships are significantly stronger than for the GOS. The FSE has demonstrated good reliability, validity, and sensitivity, and appears to be a promising instrument for monitoring recovery and assessing functional status in clinical trials.