Student conceptions related with matter and the particulate nature of matter (PNM), are vital for advanced understanding in chemistry, and have been a research area of significant attention. Lacking in the literature are studies addressing chemical misconceptions from an ontological point of view. The purpose of the current study was to develop a diagnostic instrument by utilizing ontological categories as theoretical lens and to evaluate student understanding on the topic PNM through assessment based on the relationship between ontology and misconceptions. Aligned with content in the middle school curricula, an assessment instrument of 25 distractor-driven, multiple-choice items, 15 of which were two-tier, was constructed. Subsequent to content validity work, to utilize student feedback for the improvement of the items and the validity of the inferences, we pilot tested our instrument with 178 students. Cross-sectional survey methodology was employed for the larger assessment work across Grades 6–11. Data were collected from a randomly selected sample of 696 students attending primary and secondary schools. The overall trend emerged to be improved student knowledge with increasing grade level. The students most often tended to attribute the properties of macroscopic matter to its microscopic particles and had most difficulty in explaining dissolution at the particle level, confirming previous national and international findings. An understanding of misconceptions from an ontology perspective may further assist educators to enhance a radical conceptual change. Distractor-driven, two-tier multiple-choice items are envisioned to aid stakeholders in curriculum development and implementation by illuminating student conceptions and ways of thinking.