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Background This paper describes the development and validation of the Memory Inventory for Chinese (MIC), for measuring the awareness of memory deficits in the Chinese population with Alzheimer's disease (AD). Methods A combination of qualitative and quantitative approaches was adopted. The MIC was developed with focus group discussion and pilot testing. It has a patient and a caregiver version. A consecutive series of 79 new out-patients with the National Institute of Neurological and Communicative Disorders and Stroke and the Alzheimer's Disease and Related Disorder Association (NINCDS-ADRDA) criteria of probable and possible AD and 20 non-demented elderly subjects were recruited. Results A high internal consistency was found, with Cronbach alpha of 0.89 for the patient version and 0.90 for the caregiver version of MIC. The inter-rater reliability was satisfactory. For validity assessment, the caregiver score of the MIC correlated significantly with cognitive score of the subject as assessed by the Mini-Mental State Examination (rp = -0.37; p < 0.01). The Memory Deficit Awareness Score, calculated by subtracting the patient score from the caregiver score, correlated significantly with clinician ratings of awareness of memory impairment (rs = -0.67; p < 0.01). Conclusions The MIC appears to be a culturally appropriate and valid instrument for the measurement of awareness of memory deficits in Chinese patients with AD. Potential applications of the MIC should be further explored in other subtypes of dementia and in prospective studies. Copyright © 2006 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]