The study aims to develop and psychometrically test an instrument to assess trust in public sector organizations. Although trust-based management is of interest in many municipalities in the Nordic countries, an instrument to assess trust adapted for this context is lacking. The present study complies with Luhmann’s system theory and commonly used instruments in this tradition. Data from 240 first-line managers (RR 75%) and 1,871 employees (RR 47%) from all departments in one Swedish municipality were analyzed with a multi-level approach. Out of 16 initial items presented to first-line managers and employees, 8 were retained after the psychometrical testing in both samples. Factor loadings at both within and between levels, and the multilevel homology when exploring convergent and criterion-related validity, showed a similar pattern of two distinct factors. Similar to other previously developed instruments, Supervisory Trust was one dimension. The second construct Organizational Trust included items on trust in politicians and administrative specialists, in addition to trust in top-level managers. The Public Sector Organizational Trust Inventory can be recommended for use in future research on trust at individual as well as group levels.