Background: Negative attitudes toward dementia may pose an obstacle to the early diagnosis and treatment of this syndrome. However, because no scale has been designed to measure fear of dementia, a reliable and valid instrument that is able to measure accurately the multifaceted attributes of fear of dementia must be developed. Purpose: This study was designed to develop a scale to measure fear of dementia in community-dwelling older adults and to examine its validity and reliability. Methods: A preliminary version of the measurement scale was developed using a literature review and conceptual framework. Expert analysis of content validity, item analysis based on classic test theory and item response theory, factor analysis, reliability analysis, criterion validity test, and a Rasch model analysis were performed for the psychometric evaluation. Data were analyzed using SPSS 22.0, AMOS 22.0, and WINSTEPS 3.92.1. Results: The factor analysis revealed three dimensions, five factors, and 19 items that explain 78.44% of the total variance. The three dimensions are cognitive, social, and physical, and the five factors are (a) direct experience of precursor symptoms of dementia, (b) preliminary knowledge of dementia, (c) concerns about family burden, (d) shame, and (e) physical response. Conclusions: The Fear of Dementia Scale for older adults was shown to be valid and reliable. Therefore, this scale may be used to accurately measure the fear of dementia in elderly individuals. Using this scale to identify the level of fear of dementia will facilitate the early diagnosis, treatment, and prevention of dementia.