Abstract Background Technology-based assessments using 2D virtual reality (VR) environments and goal-directed instrumented tasks can deliver digital health metrics describing upper limb sensorimotor function that are expected to provide sensitive endpoints for clinical studies. Open questions remain about the influence of the VR environment and task complexity on such metrics and their clinimetric properties. Methods We aim to investigate the influence of VR and task complexity on the clinimetric properties of digital health metrics describing upper limb function. We relied on the Virtual Peg Insertion Test (VPIT), a haptic VR-based assessment with a virtual manipulation task. To evaluate the influence of VR and task complexity, we designed two novel tasks derived from the VPIT, the VPIT-2H (VR environment with reduced task complexity) and the PPIT (physical task with reduced task complexity). These were administered in an observational longitudinal study with 27 able-bodied participants and 31 participants with multiple sclerosis (pwMS, VPIT and PPIT only) and the value of kinematic and kinetic metrics, their clinimetric properties, and the usability of the assessment tasks were compared. Results Intra-participant variability strongly increased with increasing task complexity (coefficient of variation + 56%) and was higher in the VR compared to the physical environment (+ 27%). Surprisingly, this did not translate into significant differences in the metrics’ measurement error and test–retest reliability across task conditions (p > 0.05). Responsiveness to longitudinal changes in pwMS was even significantly higher (effect size + 0.35, p