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Objective Informal caregivers of people with advanced cancer experience many negative impacts as a result of their role. There is a lack of suitable measures specifically designed to assess their experience. This study aimed to develop a new measure to assess self-efficacy in caregivers of people with advanced cancer. Methods The development and testing of the new measure consisted of four separate, sequential phases: generation of issues, development of issues into items, pilot testing and field testing. In the generation of issues, 17 caregivers were interviewed to generate data. These data were analysed to generate codes, which were then systematically developed into items to construct the instrument. The instrument was pilot tested with 14 health professionals and five caregivers. It was then administered to a large sample for field testing to establish the psychometric properties, with established measures including the Brief Cope and the Family Appraisals for Caregiving Questionnaire for Palliative Care. Results Ninety-four caregivers completed the questionnaire booklet to establish the factor structure, reliability and validity. The factor analysis resulted in a 21-item, four-factor instrument, with the subscales being termed Resilience, Self-Maintenance, Emotional Connectivity and Instrumental Caregiving. The test-retest reliability and internal consistency were both excellent, ranging from 0.73 to 0.85 and 0.81 to 0.94, respectively. Six convergent and divergent hypotheses were made, and five were supported. Conclusions This study has developed a new instrument to assess self-efficacy in caregivers of people with advanced cancer. The result is a four-factor, 21-item instrument with demonstrated reliability and validity. Copyright © 2012 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]