The functional differences between persons with amputation who are classified as Medicare Functional Classification Level (MFCL)-2 and -3 include the abilities to walk at various cadences and to negotiate environmental barriers outside the home. This study compared the effect of active microprocessor control and passive mechanical control of the prosthetic knee on function and safety in 17 subjects with transfemoral amputation (8 MFCL-2 and 9 MFCL-3). Assessed functional tasks included hill and stair descent, an attentional demand task, and an obstacle course. Self-reported measures included concentration, multitasking ability, and numbers of stumbles and falls. Active knee control was associated with significant improvements (p < 0.05) in hill and stair gait, speed (hills, obstacle course, and attentional demand task), and ability to multitask while walking for both cohorts. MFCL-2 subjects also reported a significant reduction (p < 0.01) in uncontrolled falls. Over the study, 50% of MFCL-2 subjects and 33% of MFCL-3 subjects transitioned to a higher MFCL. Results suggest that active knee control improves function and reduces the frequency of adverse events in a population that is at risk for falls. Use of active knee control may allow persons with amputation to expand their functional domain, transition to a higher MFCL, and access additional prosthetic options.