Objective. To evaluate the impact of polymyalgia rheumatica (PMR) on clinical outcomes and quality of life (QOL); the relationship between laboratory measures and clinical outcomes, and changes in QOL; and agreement between rheumatologists in confirming the initial diagnosis. Methods. We conducted a prospective study of 129 participants in 8 hospitals in England who met a modified version of the Jones and Hazleman criteria and had not started steroid therapy. The main outcome measures were response to steroids after 3 weeks (minimum 50% improvement in proximal pain, morning stiffness <30 minutes, acute-phase response not elevated), relapses, QOL as measured by the Short Form 36 and Health Assessment Questionnaire, and diagnosis reassessment at 1 year. Results. At 3 weeks, 55% of participants failed to meet our definition of a complete response to steroid therapy. Both physical and mental QOL at presentation were substantially lower than general population norms and improved by 12.6 (95% confidence interval [95% CI] 10.8, 14.4) and 11.2 (95% CI 8.5, 13.8) points, respectively, at 1 year. Proximal pain and longer morning stiffness were significantly associated with lower physical QOL during followup, whereas erythrocyte sedimentation rate was most strongly associated with lower mental QOL during followup. There was moderate agreement between clinicians in confirming the PMR diagnosis (kappa coefficients 0.49 -0.65). Conclusion. PMR is a heterogeneous disease with a major impact on QOL. Ongoing monitoring should include disease activity based on symptoms, emergence of alternative diagnoses, and early referral of atypical and severe cases.