Quality of life (QOL) is increasingly recognized as an important outcome measure in treatment studies and service evaluation. However, patients or service users may sometimes lack the capacity to either evaluate or express their subjective QOL, for example due to cognitive impairment, communication disorders, symptom distress or burden of completing the assessment itself. This paper describes the development of an instrument, the capacity to report subjective quality of life inventory (CapQOL), which evaluates the ability of patients to appraise their subjective QOL and to complete related measures. The CapQOL is a simple and brief screening tool, designed for use in people with a wide range of mental disabilities. It helps researchers to identify individuals who are unable to appraise or report their subjective quality of life. We administered the CapQOL to 442 patients with early psychosis. About 89% of the participants were assessed to be able to complete a subjective QOL measure. The CapQOL demonstrated satisfactory psychometric properties. Further validation studies in people with psychosis as well as other mental disabilities are indicated.