Aim: To develop and psychometrically test the Engagement of a Person with Dementia Scale. Background: It is important to study engagement in people with dementia when exploring the effectiveness of psychosocial interventions that can promote meaningful activity, stimulation and well-being, through an increase in positive emotions and an improvement in quality of life. The Engagement of a Person with Dementia Scale was developed based on current literature and previous research work on a video coding tool to ascertain the effect of psychosocial interventions on engagement in people with dementia. Design/Method: Using the Delphi technique, the content validity of the scale was evaluated by 15 dementia experts and formal/informal dementia carers. Psychometric properties of the scale were evaluated using 131 videos of people with dementia presented with PARO—a therapeutic, interactive, robotic seal—in long-term aged care facilities. Results: A 10-item scale was established following the rewording, combining and elimination of prospective items, with revisions made to the instructions for using and scoring the scale. An overall consensus with agreement for the scale was established among the panel of experts. The scale demonstrated robust internal consistency, inter-rater and test–retest reliability and convergent and discriminant validity. Conclusion: This study successfully developed the Engagement of a Person with Dementia Scale, with established content validity and psychometric properties. The scale assesses the behavioural and emotional expressions and responses of engagement by people with dementia when partaking in a psychosocial activity in five areas: affective, visual, verbal, behavioural and social engagement.