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Dementia Friendly communities and initiatives are increasingly considered as a critical part of dementia care delivery, yet there is no universally accepted model of what constitutes “dementia friendly”. Medical and other sectors have suggested awareness, inclusion, formal benefits, and informal services as potential goals of becoming dementia friendly, but there is no direct link between these system-based changes and outcomes of Persons with Dementia. To prioritize communities' and societies' efforts to become dementia friendly in a person-centered design, we conducted a series of four structured focus groups involving Persons with Dementia and their primary caregivers, comparing their lived experiences with potential improvement in awareness, inclusion, formal benefits, informal services, and other non-medical formal services. Based on the outcomes of these focus groups, we developed and validated a novel tool to measure stigma associated with dementia. 27 Persons with Dementia and 23 caregivers participated in the four focus groups (49 from US and 1 from UK). While initial opinions on the necessary steps towards becoming dementia friendly differed between individuals and families, the structured interviews from each focus group converged on reducing external stigma associated with dementia as the first step towards improving inclusion, formal benefits, and informal services. Based on published measures of stigma associated with mental health from the US and UK, we developed the Beliefs and Attitudes Towards Dementia Survey. This survey consists of 25 Likert-scale questions to assess attitudes towards characteristics and needs of Persons with Dementia; respect/tolerance, social inclusion, and formal services for Persons with Dementia; and biological vs. behavioral contribution to the development of dementia. The survey was validated in 30 cognitively normal subjects with highly reproducible results (average Cornbach's alpha value of 0.876, range of 0.688–1.000). To the best of our knowledge, this is the first person-centered process to identify stigma associated with dementia as a key barrier towards dementia friendly communities and initiatives. In follow-up, we developed the first validated tool to assess external stigma associated with dementia (the disease) and Persons with Dementia so that future intervention studies can effectively quantify changes in attitudes towards Persons with Dementia.