Background The dementia diagnosis gap in sub-Saharan Africa (SSA) is large, partly due to difficulties in assessing function, an essential step in diagnosis. Objectives As part of the Identification and Intervention for Dementia in Elderly Africans (IDEA) study, to develop, pilot, and validate an Instrumental Activities of Daily Living (IADL) questionnaire for use in a rural Tanzanian population to assist in the identification of people with dementia alongside cognitive screening. Design The questionnaire was developed at a workshop for rural primary healthcare workers, based on culturally appropriate roles and usual activities of elderly people in this community. It was piloted in 52 individuals under follow-up from a dementia prevalence study. Validation subsequently took place during a community dementia-screening programme. Construct validation against gold standard clinical dementia diagnosis using DSM-IV criteria was carried out on a stratified sample of the cohort and validity assessed using area under the receiver operating characteristic (AUROC) curve analysis. Results An 11-item questionnaire (IDEA-IADL) was developed after pilot testing. During formal validation on 130 community-dwelling elderly people who presented for screening, the AUROC curve was 0.896 for DSM-IV dementia when used in isolation and 0.937 when used in conjunction with the IDEA cognitive screen, previously validated in Tanzania. The internal consistency was 0.959. Performance on the IDEA-IADL was not biased with regard to age, gender or education level. Conclusions The IDEA-IADL questionnaire appears to be a useful aid to dementia screening in this setting. Further validation in other healthcare settings in SSA is required.