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Objective: This study was designed to produce a new parent‐report measure, the Diagnostic Receptive Expressive Assessment of Mandarin‐Infant Toddler Assessment of Communication and Language (DREAM‐IT) in order to provide norms for the developmental skills of children aged 0–36 months in four areas: expressive language, receptive language, cognitive play and social skills. Methodology: The scale was designed to be both broader and deeper than existing instruments that neglect one or more of these significant domains involved in early language. Items were chosen by a group of specialists with clinical experience working with the age group and with attention to the developmental literature. Caregivers were tested individually by a trained person who asked the questions and provided examples. In addition to an extensive health questionnaire, caregivers answered questions in Mandarin about their child's behaviour using a scale of 'not yet', 'sometimes' or 'always' or listing out words and/or sounds understood or said by the child. The 476 participating caregivers were recruited at maternal and child healthcare clinics centred in Chengdu, China, 191 of whom were tested a second time seven months later. The children were sampled in three‐month age‐bands from 0 to 36 months. The sample was balanced for child gender by age band, and parental education was balanced. Caregivers of 0–24‐month‐old children and caregivers of 12–36 months were each asked a different set of questions, to determine the appropriate age range and cutoff points for each question, requiring the sample size to be doubled for children aged 12–24 months. Results: The results were subject to item‐response theory analysis to remove outlying items, and the resulting internal reliability was high for each domain (average Cronbach's alpha=0.87). The final instrument (between 67 and 113 questions in total) was refined to include the least redundant questions that had the highest intercorrelations, with attention paid to coverage of all domains across the age range. Two scales were developed: one for children 0–18 months, the second for children aged 18–36 months. The longitudinal design permitted the creation of growth curves and norms for each domain for six‐month intervals from 0 to 36 months. A small sample of 32 parents of children with Down syndrome aged 18–36 months provided validation that the scales are highly sensitive to developmental delay. Conclusion: The instrument shows considerable promise for detecting early communication problems in children in China. WHAT THIS PAPER ADDS: What is already known on the subject: In China, efforts were made in recent years to develop language assessments for infants and toddlers, but limitations existed with the domains included and number of items included per age group. Many clinical practitioners also continued to rely on language subtests of general developmental scales, which were limited in depth and breadth of language skills tested and were never intended for diagnosis of language delay. What this paper adds to existing knowledge: This paper discusses the development of a valid caregiver report instrument for early communication and language skills of infants and toddlers in mainland China. The Diagnostic Receptive Expressive Assessment of Mandarin‐Infant Toddler (DREAM‐IT) includes foundational domains necessary for language and communication development in young children (receptive language, expressive language, cognitive play and social communication domains). The results show strong internal reliability (Cronbach's alpha) for each domain on a sample of 716 children sampled in three‐month age bands from 0 to 36 months. The external validity proved strong when tested on a group of 32 young children with Down syndrome. What are the potential or actual clinical implications of this work?: Besides helping to inform the diagnosis of language delays in infants and toddlers in China, the caregiver report instrument has special features to support clinical practitioners in a field that is just emerging in China. The unique support features include the automatic generation of a profile of relative strengths and weaknesses of the child on the report and the recommendation of child‐specific caregiver coaching videos on a companion app. [ABSTRACT FROM AUTHOR]