Background: Clinical management of patellofemoral (PF) instability is a challenge, particularly considering the number of variables that should be taken into consideration for treatment. Quality of life is an important measure to consider with this patient population. Purpose: To factor analyze and reduce the total number of items in the Banff Patella Instability Instrument (BPII). Subsequent to the factor analysis, the new, item-reduced BPII 2.0 was tested for validity, reliability, and responsiveness. Study Design: Cohort study (diagnosis); Level of evidence, 2. Methods: Quality of life was measured for PF instability patients (N = 223) through use of the original BPII at their initial consultation. Data from the BPII scores were used in a principal components analysis (PCA) to factor analyze and reduce the total number of items in the original BPII, to create a revised BPII 2.0. The BPII 2.0 underwent content validation (Cronbach alpha, patient interviews, and grade-level checking), construct validation (analysis of variance comparing the initial visit and the 6-, 12-, and 24-month postoperative visits, eta-square), convergent validation (Pearson r correlation to the original BPII), responsiveness testing (eta-square, anchor-based distribution testing), and reliability testing (intraclass correlation coefficient [ICC]). Results: The BPII was successfully reduced from 32 to 23 items with excellent Cronbach alpha values in the new BPII 2.0: initial visit = 0.91; 6-month postoperative visit = 0.96; 12-month postoperative visit = 0.97; and 24-month postoperative visit = 0.76. Grade-level reading for all items was assessed as below grade 12. The BPII 2.0 was able to discriminate between all time periods with significant differences between groups (P < .05). Eta-square was 0.40, demonstrating a medium to large effect size. The BPII significantly correlated with the BPII 2.0 (0.82, 0.90, 0.90, and 0.94 at the initial visit and 6-, 12-, and 24-month postoperative visits, respectively), providing evidence of convergent validity. A significant correlation was found between the 7-point scale and 24-month postoperative BPII 2.0 scores, a sign of anchor-based responsiveness. ICC (2,k) was 0.97, indicating strong reliability. Conclusion: The BPII 2.0 is valid, reliable, and responsive for assessment of patients with PF instability, both surgically and nonsurgically treated.