The Participation Scale was developed as an observational measure of activity engagement (as rated by group facilitators) of adult day care clients with mild to moderate dementia. In a consecutive sample of 448 subjects Mokken scaling procedure was conducted to assess the latent structure of 27 questionnaire items. The study included an exploratory and a confirmatory approach. For that purpose the sample was randomly divided into two halves. Exploratory analysis revealed three dimensions of participation that adequately captured the item structure: motivation (10 items; Loevinger’s H = 0.48), competence (7 items; H = 0.56) and self-confidence (4 items; H = 0.57). The structure was validated in a confirmatory analysis. In a stepwise multiple regression model 49% of the variance in motivation was explained by independent behavioural measures of apathy and affect. Apathy and cognitive impairment were significant predictors of competence in participation (R2 = 31.2%). Negative affect was the main predictor of reduced self-confidence (R2 = 37.9%). Cross-validation of these exploratory regression models on the confirmatory sample explained 39.6%, 29.2% and 23.1% of the variance in motivation, competence and self-confidence, respectively. Test-retest intraclass correlation coefficients (ICC2(A,1)) as determined in a random subsample of 56 participants, were 0.77 (motivation), 0.85 (competence) and 0.76 (self-confidence). The three measures allow the differentiation and ordering of individual participants on separate dimensions of activity engagement in psychogeriatric day care.