This article reports on the development and validation of a novel, objective test of judgment for use with older adults. The Test of Practical Judgment (TOP-J) is an open-ended measure that evaluates judgment related to safety, medical, social/ethical, and financial issues. Psychometric features were examined in a sample of 134 euthymic individuals with mild Alzheimer's disease (AD), amnestic mild cognitive impairment (MCI), or cognitive complaints but intact neuropsychological performance (CC), and demographically-matched healthy controls (HC). Measures of reliability were adequate to high, and TOP-J scores correlated with select measures of executive functioning, language, and memory. AD participants obtained impaired TOP-J scores relative to HCs, while MCI and CC participants showed an intermediate level of performance. Confirmatory factor analyses were consistent with a unidimensional structure. Results encourage further development of the TOP-J as an indicator of practical judgment skills in clinical and research settings. Longitudinal assessments are being performed to examine predictive validity of the TOP-J for cognitive progression in our clinical groups.