BACKGROUND: Despite its inclusion as a key aspect of successful mental health care service provision by the World Health Organization, there exists a lack of consensus regarding the definition, key components and implementation of deinstitutionalisation. This lack of consensus has also contributed to subjectivity in assessments of countries' progress towards deinstitutionalisation which act as a barrier to its evaluation and success. In order to provide for reliable within and cross country evaluations of the success of deinstitutionalisation we aimed to develop a quantitative measure of country-level progress towards deinstitutionalisation through the (1) identification of key markers of deinstitutionalisation; (2) development of an assessment tool based on the identified markers; (3) evaluation of the tool's psychometric properties; and (4) comparison of progress towards deinstitutionalisation across Europe. METHODS: National care standards from 10 European countries and World Health Organization recommendations were used to identify items for the tool. A draft version was reviewed by an international expert panel and assessed for test-retest reliability and internal consistency. Once a final version had been agreed, progress towards deinstitutionalisation was assessed for 30 European countries. We used this opportunity to test convergent validity through comparison with local experts' assessments. Country total as well as individual item scores were described and compared. RESULTS: The five-item Mental Health Services Deinstitutionalisation Measure (MENDit) is an objective tool with moderate to very good test-retest reliability (Kappa range: 0.46-1.00) and internal consistency (α = 0.70, 95 % CI 0.25, 0.92). A statistically significant difference between groups was found by one-way ANOVA (F(3,26) = 6.77, p = 0.002). Post-hoc testing found significant differences between MENDit scores of countries categorised as having advanced levels of deinstitutionalisation and not started or just started. Across Europe, MENDit scores suggest substantial variety in progress towards deinstitutionalisation. CONCLUSIONS: The MENDit has good psychometric properties which support its use in research and as a benchmarking tool to measure national progress towards deinstitutionalisation by policy makers. Across Europe a high proportion of psychiatric beds are still located in psychiatric hospitals. Additionally, low numbers of mental health professionals in many countries may hinder further deinstitutionalisation. These findings corroborate previous mental health systems research and highlight some of the difficulties of deinstitutionalisation.