Background The Perceived Functioning & Health (PFH) questionnaire was developed to collect, in a standardized manner, which work activities are limited due to health conditions according to the perception of the client. In this study the questionnaire’s reliability and validity are investigated. Methods The PFH questionnaire is comprised of 147 questions, distributed over 33 scales, pertaining to the client’s psychosocial and physical work limitations. The PFH data of 800 respondents were analyzed: 254 healthy employees, 408 workers on sick leave and 138 recipients of a disability pension. Internal consistency (Cronbach’s α) for the scales was established. The test–retest reliability was examined for the data of 52 recipients of a disability pension who filled out the PFH twice within an interval of 1 month. Validation was established by taking the nature of the limitations as a criterion: mental limitations, physical limitations or a mix of both. To this end, the respondents were divided into groups distinguished on the basis of self-classification, as well as classification on the basis of disease codes given by insurance and occupational health physicians: a “healthy” group, subjects with only physical (“physical” group) or mental limitations (“mental” group) or mixed limitations (“mixed” group). The scale scores of these groups were compared and tested using analyses-of-variance and discriminant analyses. Results The scales were found to have sufficient to good internal consistency (mean Cronbach’s-α = 0.79) and test–retest reliability (mean correlation r = 0.76). Analyses-of-variance demonstrated significant differences between the scores of the mental, physical and healthy groups on most of the expected scales. These results were found both in groups defined by self-classification as well as in groups based on disease codes. Moreover, discriminant analyses revealed that the a priori classification of the respondents into three groups (mental, physical, healthy) for more than 75% of them corresponded with the classification on the basis of scale scores obtained from the questionnaire. Furthermore, limitations due to specific types of complaints (low back pain, fatigue, concentration problems) or diagnosed disorders (musculoskeletal disorders, reactive disorders, endogenous disorders) were clearly reflected in the scores of the related scales of the PFH. Conclusion The psychometric properties of the PFH with respect to reliability and validity were satisfactory. The PFH would appear to be an appropriate instrument for systematically measuring functional limitations in subjects on sick leave and in those receiving disability pensions, and could be used as a starting point in a disability claim procedure.