We hypothesized that patients undergoing transtibial amputation osteomyoplasty would have better functional outcomes than patients undergoing traditional transtibial amputation. We conducted a retrospective review of the medical and radiographic records to evaluate and compare 26 patients who underwent transtibial amputation osteomyoplasty and 10 patients who underwent traditional transtibial amputation, with specific attention to perioperative complications and functional outcomes. At >1 year follow-up, patients who underwent amputation osteomyoplasty had significantly improved rates of return to work and decreased rates of revision than patients who underwent traditional transtibial amputation. Sickness Impact Profile questionnaire results completed at a mean of 28 months postoperatively showed significantly better overall scores and physical and psychosocial dimension scores for amputation osteomyoplasty patients. Based on the results of this study, the outcomes of amputation osteomyoplasty appear to be safe and may be more beneficial than traditional amputation, in terms of improved functional outcomes for patients after severe lower-extremity trauma.