The extended H i disc and tidal tails of M81 present an interesting environment to study the effects of galaxy interaction on star formation and chemical evolution of the outer disc of a large spiral galaxy. We present Hα imaging of the outer disc of M81 and luminosities for 40 H ii regions out to ∼3 R25. We have also obtained MMT spectra for 21 H ii regions out to more than twice R25. We derive strong-line oxygen abundances for all H ii regions using R23-based and [N ii]/[O ii]-based calibrations and electron temperature abundances for seven regions spanning a galactocentric distance between 5.7 and 32 kpc. We also comment on the abundances of H ii regions near KDG 61 and the ‘tidal dwarf’ candidate HoIX. Our results constitute the most radially extended metallicity study for M81 to date. With this extended data set, we find an overall oxygen abundance gradient of Δ(log (O/H))/ΔRG∼−0.013 dex kpc−1 over the entire radial range. This is significantly flatter than what has been found in previous studies, which were limited to the optical disc. From our temperature-based abundances, we find Δ(log (O/H))/ΔRG∼−0.020 dex kpc−1 and present the possibility of a broken gradient from these data, but note the need to obtain more temperature-based abundances at intermediate galactocentric distances (∼10–20 kpc) to verify whether or not this may be the case. We discuss our main result of a rather flat gradient for M81 in the context of simulations and observations of abundance gradients in other galaxies. We find that the shallow abundance gradient of M81 is likely a result of the interaction history of this galaxy.