Although a few papers documented benefits of group therapeutic activities for individuals with dementia, there is a dearth of studies that have investigated the effects of group activities on persons with dementia. This paper introduces a theoretical framework of studying group therapeutic recreational activity, the Comprehensive Process Model of Group Engagement, and an assessment tool, the Group Observational Measurement of Engagement (GOME). We also report the psychometric properties of this assessment. One hundred and four persons with dementia took part in ten different group activities, with each activity conducted twice at random order so that 20 activities were observed for each group of participants. Following each group activity, research and therapeutic recreation staff members used the GOME assessment to independently rate participants on individual-level measures of attendance duration and engagement, and group level measures (e.g., positive and negative interactions among group members). Reliability and validity analyses comparing observer ratings for each group activity on the individual-level measures of attendance and engagement showed good psychometric properties. Different measures collected on a group level differed with respect to their psychometric quality. We present a theoretical framework to understand group engagement and present measures that could be used in future research and practice.