Background: Service quality is an important dimension for examining value of hospitals. Satisfaction of patients from the available service quality determines the overall value of a hospital. The increasing emphasis of services in hospitals and patients satisfaction has called for providing improved service which yields more satisfaction. Aims & Objectives: The aim of the study was to develop and validate a questionnaire that measures service quality and patients satisfaction in hospitals. Material & Methods: A self structured questionnaire containing 29 items was initially developed and was subjected to scrutiny by the experts to access the content validity of the questionnaire. A total of 200 patients responded to the service quality and satisfaction scale. The reliability of the scale was determined by Coefficient of Cronbach’s α. Exploratory factor analysis was used to test the validity of the scale and further the hypothetical model was evaluated by structural equation modelling for adequacy of goodness-of-fit to sample data. Result: The resultant outcome showed that the proposed model was a good fit. Conclusion: The result concludes that the conceptualised domain of service quality and patients satisfaction could be measured successfully through the use of the 18 item instrument developed in this study.