Objectives Only rudimentary tools exist to support health system organizations to evaluate their public and patient engagement (PPE) activities. This study responds to this gap by developing a generic evaluation tool for use in a wide range of organizations. Methods The evaluation tool was developed through an iterative, collaborative process informed by a review of published and grey literature and with the input of Canadian PPE researchers and practitioners. Over a 3‐year period, structured e‐mail, telephone and face‐to‐face exchanges, including a modified Delphi process, were used to produce an evaluation tool that includes core principles of high‐quality engagement, expected outcomes for each principle and three unique evaluation questionnaires that were tested and revised with input from 65 end users. Results The tool is structured around four core principles of ‘quality engagement’: (i) integrity of design and process; (ii) influence and impact; (iii) participatory culture; and (iv) collaboration and common purpose. Three unique questionnaires were developed to assess each of these four evaluation domains from the following perspectives: (i) those who participate in PPE activities; (ii) those who plan, execute or sponsor PPE activities within organizations; and (iii) those who provide the leadership and capacity for PPE within their organizations. Conclusions This is the first known collaboration of researchers and practitioners in the co‐design of a comprehensive PPE evaluation tool aimed at three distinct respondent groups and for use in a wide range of health system organization settings.