Abstract Background according to the World Health Organisation, the role of the environment for older adults is to maintain and facilitate independence and promote quality of life. However, measures that examine the environment in terms of its potential impact on older people are either oriented towards specific aspects of the environment, specifically designed for community-level assessment rather than individually oriented, or are unwieldy for everyday use. Objectives this article describes the development and validation of the Age-Friendly Environment Assessment Tool (AFEAT), assessing whether individual function and frailty impact on perceptions of environmental age-friendliness. The extent to which such perceptions may have moderate impacts of frailty on outcomes such as need for care support, quality of life and loneliness is examined. Methods a total of 132 participants aged 58–96 were recruited from retirement villages and local communities in the Midlands of the UK. Participants completed the AFEAT, and a series of measures designed to assess frailty and assessments of quality of life, loneliness and perceptions of functional limitations. Results internal reliability assessment indicated that the AFEAT possesses a Cronbach’s Alpha score of 0.745. The AFEAT significantly predicted quality of life and loneliness, accounting for 17.1% and 5.8% of variance respectively, indicating high concurrent and predictive validity. Furthermore, the AFEAT moderated the predictive strength of frailty in predicting the amount of formal care an individual receives, but not quality of life or loneliness. Discussion the AFEAT is a valid and reliable tool, and analyses highlight the need for an individual-oriented Age-Friendly environment tool.