The purpose of this study was to examine the role of psychosocial factors in the discordance between perceived and observed physical disability in patients with osteoarthritis of the hip or knee joint. This was a cross-sectional study of patients seen for consideration of joint arthroplasty surgery. Patients completed a psychosocial outcome measure, a patient self-reported functional scale, and two performance-based tests. Data of 121 patients, mean age, 67 (8), 81 (67%) females were used for analysis. The fear avoidance and positive affect domains had the strongest association with the discordance between the self-report and both performance outcome measures. Age, gender, and severity of osteoarthritis were associated with discordance in relation to walking. Fear avoidance beliefs and positive affect play important roles in perception of pain and function. Age, gender, and severity of arthritis should be taken into consideration for a more holistic approach to arthritis care.