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Background: Home environment is a core domain in the care of community-dwelling older adults with dementia, but there is no suitable instrument to measure it in China., Objective: To develop and psychometrically test the home environment assessment checklist for community-dwelling older adults with dementia., Methods: A three-step process was performed to develop and test this instrument: 1) based on the evidence-based theory, the checklist was summarized as the main points of evidence from living environment settings among older adults with dementia, 2) the draft tool was assigned to an iterative process of evaluation by a panel of examiners consisting of experts from treatment, nursing and caring, people with dementia and their caregivers, 3) inter-rater reliability and internal consistency were calculated with a sample of 348 caregivers of the older adults with dementia., Results: The HEAC consisted of 71 items in domains addressing safety, stability and familiarity, visual cues, and sensory stimulation. Psychometric evaluation showed that this tool demonstrated sound reliability and validity. Content validity was 0.969 which was established by a panel of experts (n = 10). Inter-rater reliability of two researchers was 0.978, and 0.848 for researchers and caregivers. Test-retest reliability was excellent (ICC = 0.757-0.877) in community-dwelling older adults with dementia 2 week apart., Conclusion: The HEAC is a new tool to help collect the reliable information on the barriers and facilitators of home environment for community-dwelling older adults with dementia and to precipitate the home modification process to improve the quality of care for people with dementia and their caregivers in daily life.