The AMA Guides to the Evaluation of Permanent Impairment (AMA Guides) has been criticized because it was designed to measure the severity of impairment (loss of function of a body part) rather than disability (eg, inability to work), and the AMA Guides uses whole person impairment that accords higher priority to body regions that are deemed more important to functionality even though no objective evidence supports the relative importance of different body regions. This article reports on a study funded by the California Commission on Health and Safety and Workers’ Compensation (CHSWC) to address these concerns. The study found that the AMA Guides, Fifth Edition, is an effective tool for ranking the effect of physical impairments on the ability to work; people with higher physical impairment ratings, measured using the AMA Guides, consistently had higher earnings losses. The authors conclude that ratings based on the AMA Guides, Fifth Edition, probably are more accurate and consistent than ratings conducted under the previous system in California, the system used by the Veterans Administration, or systems used by Wisconsin and Florida in the 1960s. The authors also identified significant challenges to using ratings based on the AMA Guides to determine financial compensation, particularly across body regions, and some evidence suggests that the relationship between impairment ratings and losses was attenuated at higher ratings.