Socioecological theory suggests that there are a range of influences that affect the physical activity levels of children, including parents' perceptions of the neighborhood. A questionnaire instrument to quantify parental neighborhood perceptions was developed for the Location of Children's Activity in Their Environment study as a potential predictor of children's physical activity. A literature review revealed a lack of appropriate instruments, many containing highly localized items. Following initial instrument development including pretesting, where items showed face and content validity, a two-phase pilot study was undertaken. Pilot testing investigated test-retest reliability (overall intraclass correlation coefficient = 0.75) and internal consistency (a = 0.62 and a = 0.73 for the two phases, respectively), finding that the instrument was acceptable overall although some changes in wording were made to specific items with low reliability and/or internal consistency. Using data from the first year of the Location of Children's Activity in Their Environment study, the instrument showed acceptable internal consistency (overall a = 0.73) and predictive validity (associated with time living in residence and walking to school) to be used in future studies. The scale was not found to be associated with child physical activity, which may be due to activity displacement. Proposed subscales for the neighborhood infrastructure and social aspects were marginal for internal consistency and a safety subscale was not acceptable in this regard. Given the impact of parental perceptions of the neighborhood, and its potential modifiable nature, a measure of it should be included in studies looking at the intensity and location of children's physical activity.