Changes in health policy have underlined the importance of evidence-based clinical practice and rigorous evaluation of patient-based outcomes. As patient-based outcome measurement is particularly important in treatment trials of multiple sclerosis, a number of disease-specific instruments have been developed recently. One limitation of these instruments is that none was developed using the standard psychometric approach of reducing a large item pool generated from people with multiple sclerosis. Consequently, an outcome measure for clinical trials of multiple sclerosis that is disease specific and combines patient perspective with rigorous psychometric methods will complement existing instruments. The aim of this study was to develop such a measure. Standard psychometric methods were used. A pool of 129 questionnaire items was generated from interviews with 30 people with multiple sclerosis, expert opinion and literature review. The questionnaire was administered by postal survey to 1530 people selected randomly from the Multiple Sclerosis Society membership database. Redundant items and those with limited measurement properties were removed. The remaining items (n = 41) were grouped into scales using factor analysis, and then refined to form the Multiple Sclerosis Impact Scale (MSIS-29), an instrument measuring the physical (20 items) and psychological (nine items) impact of multiple sclerosis. Five psychometric properties of the MSIS-29 (data quality, scaling assumptions, acceptability, reliability and validity) were examined in a separate postal survey of 1250 Multiple Sclerosis Society members. A preliminary responsiveness study of the MSIS-29 was undertaken in 55 people admitted for rehabilitation and intravenous steroid treatment of relapses. The MSIS-29 satisfied all psychometric criteria. Data quality was excellent, missing data were low (maximum 3.9%), item test-re-test reliability was high (r = 0.65-0.90) and scale scores could be generated for >98% of respondents. Item descriptive statistics, item convergent and discriminant validity, and factor analysis indicated that it was legitimate to generate scores for MSIS-29 scales by summing items. MSIS-29 scales showed good variability, small floor and ceiling effects, high internal consistency (Cronbach's alpha <or=0.91) and high test-re-test reliability (intraclass correlation <or=0.87). Correlations with other measures and the analysis of group differences provided evidence that the MSIS-29 measures the physical and psychological impact of multiple sclerosis. Effect sizes (physical scale = 0.82, psychological scale = 0.66) demonstrated preliminary evidence of good responsiveness. These results indicate the MSIS-29 is a clinically useful and scientifically sound patient-based outcome measure of the impact of multiple sclerosis suitable for clinical trials and epidemiological studies.