To develop a Quality of Life questionnaire rated by professionals that can be used for people with dementia in different stages of the disease, living in residential settings. Development was performed in two phases: item generation and pilot testing, and a field survey to evaluate the psychometric properties. For unidimensionality we used a non-parametric model from item response theory: the Mokken scaling model, and computed the corresponding scalability coefficients, using a theory driven strategy. The pilot survey resulted in a list of 49 items. The field survey was performed in a sample of 238 people with dementia residing in ten nursing homes. The scalability of the subscales positive affect, negative affect, restless tense behavior, and social relations is strong (0.50 < H < 0.63); for care relationship, positive self image, feeling at home, and having something to do, scalability was moderate (0.40 < H < 0.49), and for social isolation it was weak (H = 0.34). The reliability coefficient Rho (under assumption of double monotonicity) varied from 0.60 for social isolation to 0.90 for positive affect (Cronbach's alpha varied from 0.59 to 0.89). Twenty-one of 40 items are suited for people with very severe dementia. The QUALIDEM is an easy to administer and sufficiently reliable rating scale that provides a QOL profile of persons with dementia in residential settings. The QUALIDEM can be used for evaluation as well as for research and practice innovation. Copyright 2006 John Wiley & Sons, Ltd.