Objective: 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. Method: 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. Results: 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. Conclusion: 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.