ABSTRACT: Objective: We developed and internally validated an algorithm for disability status in multiple sclerosis (MS) using administrative data. Methods: We linked administrative data from Manitoba, Canada to a clinical dataset with Expanded Disability Status Scale (EDSS) scores for people with MS. Clinical EDSS scores constituted the reference standard. We created candidate indicators using the administrative data. These included indicators based on use of particular health care services (home care, long-term care, rehabilitation admission), use of specific diagnostic codes (such as spasticity, quadriplegia), and codes based on use of Employment and Income Insurance. We developed algorithms to predict severe disability (EDSS ≥6.0), and to predict disability as a continuous measure. We manually developed algorithms, and also employed regression approaches. After we selected our preferred algorithms for disability, we tested their association with health care use due to any cause and infection after potential confounders. Results: We linked clinical and administrative data for 1,767 persons with MS, most of whom were women living in urban areas. All individual indicators tested had specificities >90% for severe disability, and all but a diagnosis of visual disturbance had positive predictive values (PPV) >70%. The combination of home care or long-term care use or rehabilitation admission had a sensitivity of 61.9%, specificity of 90.76%, PPV of 70.06% and negative predictive of 87.21%. Based on regression modeling, the best-performing algorithm for predicting the EDSS as a continuous variable included age, home care use, long-term care admission, admission for rehabilitation, visual disturbance, other paralytic syndromes and spasticity. The mean difference between observed and predicted values of the EDSS was −0.0644 (95%CI −0.1632, 0.0304). Greater disability, whether measured using the clinical EDSS or either of the administrative data algorithms was similarly associated with increased hospitalization rates due to any cause and infection. Conclusion: We developed and internally validated an algorithm for disability in MS using administrative data that may support population-based studies that wish to account for disability status but do not have access to clinical data sources with this information. We also found that more severe disability is associated with increased health care use, including due to infection.