Psychosocial outcome and recovery of a group of 31 consecutive adult patients with moderate to severe head injuries were prospectively investigated over a 2-year period. A friend control group was used for comparison purposes. We conclude that moderate and severe head injuries have a significant long-term impact on psychosocial functioning. More specifically, although there is an increase over time in the number of subjects who resume former levels of activity, many moderate to severely head-injured people remain unable to work, support themselves financially, live independently and participate in pre-injury leisure activities at least up to 2 years post-injury. Initially, self-perceived limitations in everyday functioning are widespread, with physical functioning being of primary concern. Over time, there is improvement in both physical and psychosocial areas. However, in spite of improvement, difficulties in psychosocial functioning become dominant later due to greater improvement in the physical area. This study gives no evidence of general increase in emotional distress with increasing time since injury.