Upper limb prostheses are specialized tools, and skilled operation is learned by amputees over time. Recently, neural prostheses using implanted peripheral nerve interfaces have enabled advances in artificial somatosensory feedback that can improve prosthesis outcomes. However, the effect of sensory learning on artificial somatosensation has not been studied, despite its known influence on intact somatosensation and analogous neuroprostheses. Sensory learning involves changes in the perception and interpretation of sensory feedback and may further influence functional and psychosocial outcomes. In this mixed methods case study, we examined how passive learning over 115 days of home use of a neural-connected, sensory-enabled prosthetic hand influenced perception of artificial sensory feedback in a participant with transradial amputation. We examined perceptual changes both within individual days of use and across the duration of the study. At both time scales, the reported percept locations became significantly more aligned with prosthesis sensor locations, and the phantom limb became significantly more extended toward the prosthesis position. Similarly, the participant’s ratings of intensity, naturalness, and contact touch significantly increased, while his ratings of vibration and movement significantly decreased across-days for tactile channels. These sensory changes likely resulted from engagement of cortical plasticity mechanisms as the participant learned to use the artificial sensory feedback. We also assessed psychosocial and functional outcomes through surveys and interviews, and found that self-efficacy, perceived function, prosthesis embodiment, social touch, body image, and prosthesis efficiency improved significantly. These outcomes typically improved within the first month of home use, demonstrating rapid benefits of artificial sensation. Participant interviews indicated that the naturalness of the experience and engagement with the prosthesis increased throughout the study, suggesting that artificial somatosensation may decrease prosthesis abandonment. Our data showed that prosthesis embodiment was intricately related to naturalness and phantom limb perception, and that learning the artificial sensation may have modified the body schema. As another indicator of successfully learning to use artificial sensation, the participant reported the emergence of stereognosis later in the study. This study provides the first evidence that artificial somatosensation can undergo similar learning processes as intact sensation and highlights the importance of sensory restoration in prostheses.