Despite the significant amount of time undergraduate students spend in introductory physics labs, there is little consensus on instructional goals and accepted diagnostic assessments for these labs. In response to these issues, we have developed the Physics Lab Inventory of Critical thinking (PLIC) to assess students' proficiency with critical thinking in a physics lab context. Specifically, the PLIC aims to evaluate students' skills in making sense of data, variability, models, and experimental methods and to assess the effectiveness of lab courses at developing these skills. Here, we discuss the statistical and expert validation of this instrument using 2681 valid student responses collected from 12 institutions during the 2017-2018 academic year. As a part of our validation, we address the impact of lab design on student performance on the instrument.