Composite tissue transplantation and new developments in the field of prosthetics have opened new frontiers in the restoration of function among upper limb amputees. It is now possible to restore hand function in affected patients; however, the indications, advantages, and limitations for either hand transplantation or prosthetic fitting must be carefully considered depending on the level and extent of the limb loss. Hand transplantation allows comprehensive hand function to be restored, yet composite tissue transplantation comes with disadvantages, making this method a controversial topic in the hand surgical community. Alternatively, prosthetic limb replacement represents the standard of care for upper limb amputees, but results in the known limitations of function, sensation, and usage. The indication for hand transplantation or prosthetic fitting strongly depends on the level of amputation, as well as on the extent (unilateral/bilateral) of the amputation. In this review, we discuss the advantages and disadvantages of hand transplantation and prosthetic replacement for upper limb amputees in general, as well as in regard to the different levels of amputation.