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Background: Improving staff performance is an issue in services for people with intellectual disability. Practice leadership, where the front line leader of a staff team focuses on service user outcomes in everything they do and provides coaching, modeling, supervision and organisation to the team, has been identified as important in improving staff performance. To date this finding is based only on self-report measures., Methods: This paper describes and tests an observational measure of practice leadership based on an interview with the front-line manager, a review of paperwork and observations in 58 disability services in Australia., Results: The measure showed good internal consistency and acceptable inter-rater reliability. Practice leadership was associated with staff practice and outcomes for service users. The observed measure of practice leadership appears to be a useful tool for assessing whether leadership within a service promotes enabling and empowering support by staff. It was found to discriminate higher and lower performing services in terms of active support., Conclusions: The measure had good reliability and validity although some further testing is required to give a complete picture of the possible uses and reliability of the measure. The measure is potentially useful in contexts of both research and service development. The confirmation of previous findings from self-report measures that practice leadership is related to the quality of staff practice and outcomes for service users has implications for policy and practice in terms of the training of managers and structures for organisational management., (© 2015 MENCAP and International Association of the Scientific Study of Intellectual and Developmental Disabilities and John Wiley & Sons Ltd.)