There is not at present a suitable disease-specific health-related quality of life instrument for uninvestigated dyspepsia and functional (non-ulcer) dyspepsia. To develop a new multi-dimensional disease-specific instrument. The Nepean Dyspepsia Index (NDI) was designed to measure impairment of a subject's ability to engage in relevant aspects of their life and also their enjoyment of these aspects; in addition, the individual importance of each aspect is assessed. A 42-item quality of life measure was developed and tested, both in out-patients presenting to general practice with upper gastrointestinal complaints (n = 113) and in a randomly chosen population-based sample (n = 347). Adequate face and content validity was documented by an expert panel. Factor analysis identified four clinically relevant subscales: interference with activities of daily living, work, enjoyment of life and emotional well-being; lack of knowledge and control over the illness; disturbance to eating or drinking; and disturbance to sleep because of dyspepsia. These scales had high internal consistency. Both symptoms and the quality of life scores discriminated dyspepsia from health. The Nepean Dyspepsia Index is a reliable and valid disease-specific index for dyspepsia, measuring symptoms and health-related quality of life.