Much of the modern Kuiper belt is thought to be the result of Neptune’s migration through a primordial belt of planetesimals, possibly interrupted by an instability amongst the giant planets. While most prior work has employed massless test particles to study this Kuiper belt formation process, we perform simulations here that include the gravitational effects of the primordial planetesimal belt consisting of ∼105 massive bodies. In our simulations, Neptune unlocks from resonance with the other giant planets and begins to migrate outward due to interactions with planetesimals before a planetary orbital instability is triggered, and afterward, residual Neptunian migration completes the formation of the modern Kuiper belt. Compared to past simulations using massless test particles, our present work exhibits a number of notable differences. First, Neptune’s planetary resonance unlocking requires the Neptunian 3:2 mean motion resonance to sweep much of the primordial disk interior to 30 au prior to the giant planet instability. This generates a pre-instability population of planetesimals that is significantly lower in semimajor axis, eccentricity, and inclination than predicted by many prior models, and this effect persists after the instability. Second, direct scattering between Pluto-mass bodies and other small bodies removes material from Neptunian resonances significantly more efficiently than the resonant dropout resulting from small changes in Neptune’s semimajor axis during scattering between Pluto-mass bodies and Neptune. Consequently, the primordial population of Pluto-mass bodies may be as few as ∼200 objects. Finally, our simulation end states display a wide variety of orbital distributions, and straightforward relationships between final bulk Kuiper belt properties and Neptune’s migration or initial planetesimal properties largely elude us. In particular, we find that the rapid, stochastic planetary orbital evolution occurring during the giant planet instability can significantly alter final Kuiper belt properties such as its inclination dispersion and the prominence of resonant populations. This complicates efforts to use modern Kuiper belt properties to confidently constrain early solar system events and conditions, including planetary orbital migration and the primordial Kuiper belt’s characteristics.