Activity is key to maintaining physical and mental health and well-being. However, as dementia affects the ability to engage in activity, care-givers can find it difficult to provide appropriate activities. The Pool Activity Level (PAL) Checklist guides the selection of appropriate, personally meaningful activities. The aim of this study was to assess the reliability and validity of the PAL Checklist when used with older people with dementia. A postal questionnaire sent to activity providers assessed content validity. Validity and reliability were measured in a sample of 60 older people with dementia. The questionnaire response rate was 83% (102/122). Most respondents felt no important items were missing. Seven of the nine activities were ranked as 'very important' or 'essential' by at least 77% of the sample, indicating very good content validity. Correlation with measures of cognition, severity of dementia and activity performance demonstrated strong concurrent validity. Inter-item correlation indicated strong construct validity. Cronbach's alpha coefficient measured internal consistency as excellent (0.95). All items achieved acceptable test-retest reliability, and the majority demonstrated acceptable inter-rater reliability. We conclude that the PAL Checklist demonstrates adequate validity and reliability when used with older people with dementia and appears a useful tool for a variety of care settings.