Hand-transplantation and improvements in the field of prostheses opened new frontiers in restoring hand function in below-elbow amputees. Both concepts aim at restoring reliable hand function, however, the indications, advantages and limitations for each treatment must be carefully considered depending on level and extent of amputation. Here we report our findings of a multi-center cohort study comparing hand function and quality-of-life of people with transplanted versus prosthetic hands. Hand function in amputees with either transplant or prostheses was tested with Action Research Arm Test (ARAT), Southampton Hand Assessment Procedure (SHAP) and the Disabilities of the Arm, Shoulder and Hand measure (DASH). Quality-of-life was compared with the Short-Form 36 (SF-36). Transplanted patients (n = 5) achieved a mean ARAT score of 40.86 ± 8.07 and an average SHAP score of 75.00 ± 11.06. Prosthetic patients (n = 7) achieved a mean ARAT score of 39.00 ± 3.61 and an average SHAP score of 75.43 ± 10.81. There was no significant difference between transplanted and prosthetic hands in ARAT, SHAP or DASH. While quality-of-life metrics were equivocal for four scales of the SF-36, transplanted patients reported significantly higher scores in "role-physical" (p = 0.006), "vitality" (p = 0.008), "role-emotional" (p = 0.035) and "mental-health" (p = 0.003). The indications for hand transplantation or prosthetic fitting in below-elbow amputees require careful consideration. As functional outcomes were not significantly different between groups, patient's best interests and the route of least harm should guide treatment. Due to the immunosuppressive side-effects, the indication for allotransplantation must still be restrictive, the best being bilateral amputees.