•Impaired illness awareness may be a barrier to seeking treatment in individuals with alcohol use disorder.•AAS is a novel scale to assess subjective illness awareness in alcohol use disorder.•AAS demonstrated good convergent and discriminant validity, internal consistency, and test-retest reliability.•AAS can be used in clinical or research settings to understand the effects of illness awareness on treatment outcomes. Impaired illness awareness in individuals with alcohol use disorder can negatively affect treatment adherence, rehabilitation, and other clinical outcomes. However, the construct of illness awareness in alcohol use disorder and its clinical implications remain to be better conceptualized and understood. The objective of this study was to develop and psychometrically test a scale designed to assess impaired illness awareness in individuals with alcohol use disorder. We developed the Alcohol Use Awareness and Insight Scale (AAS), a self-report measure that assesses the core theoretical domains of illness awareness, including general disorder or problem awareness, accurate symptom attribution, awareness of the need for treatment, and the negative consequences of the disorder in individuals with alcohol use disorder (www.illnessawarenessscales.com). Data from 99 participants was obtained using a web-based survey platform, Dynata. The AAS displayed good convergent (r = 0.88, p < 0.001) and discriminant validity with measures of illness recognition and affect states, respectively. The AAS also exhibited good internal consistency (Cronbach’s α = 0.89) and one-month test-retest reliability (intra-class correlation = 0.84). Exploratory factor analysis resulted in the retention of a single component. The AAS is a novel instrument developed to measure impaired illness awareness in individuals with alcohol use disorder. The AAS may be useful in clinical or research settings in evaluating the influence of subjective alcohol use disorder awareness on interventions to promote treatment adherence and other clinical outcomes.