Purpose: In rapidly aging societies, preserving residents’remaining functional ability (RFA) has been emphasized in nursing home (NH) care. Assessing residents’remaining function is necessary for the planning of this process. This study was done to develop and test categorizing a tool by which the RFA of nursing home residents can be assessed in order to better address their care needs and to support nurses’practice. Methods: This study was conducted in three stages: in-depth interviews with NH nurses to develop a conceptual framework for categorizing the RFA, construction of preliminary items for the categorizing tool, and then testing the tool’s validity and reliability. One hundred ninety-seven residents from ten NHs representing Korea nationwide participated. Results: The RFA of the NH residents was classified as two dimensions: physical and cognitive function. Fifteen items were developed to categorize the tool for RFA. Correlations with long-term care levels and long term care assessment scores supported the scale s criterion validity. Reliability (Cronbach s ⍺, test-retest and inter-rater reliability) was acceptable. Conclusion: This tool can be used to promote effective nursing care by improving the RFA of NH residents. This tool can also be used by nurses in their daily routine NH care.