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The problems of nurse burnout and manpower shortage relate to moral distress. Thus, having a good understanding of moral distress is critical to developing strategies that effectively improve the clinical ethical climate and improve nursing retention in Taiwan.The aim of this study was to reconstruct the model of moral distress using the grounded theory.Twenty-five staff nurses at work units who attend to the needs of adult, pediatric, acute, and critical disease or end-of-life-care patients were recruited as participants using theoretical sampling from three teaching hospitals in Taiwan. Data were collected using intensive, 2- to 3-hour interviews with each participant. Audio recordings of the interviews were made and then converted into transcripts. The data were analyzed using the grounded theory.In the clinical setting, the perspective that nurses take toward clinical moral events reflects their moral values, which trigger moral cognition, provocation, and appraisal. The moral barriers that form when moral events that occur in clinical settings contradict personal moral values may later develop into moral distress. In handling moral barriers in the clinical environment, nurses make moral judgments and determine what is morally correct. Influenced by moral efficacy, the consequence may either be a moral action or an expression of personal emotion. Wasting National Health Insurance resources and Chinese culture are key sources of moral distress for nurses in Taiwan. The role of self-confidence in promoting moral efficacy and the role of heterodox skills in promoting moral actions represent findings that are unique to this study.The moral distress model was used in this study to facilitate the development of future nursing theories. On the basis of our findings, we suggested that nursing students be encouraged to use case studies to establish proper moral values, improve moral cognition and judgment capabilities, and promote moral actions to better handle the regular pressures of moral distress in future clinical or workplace settings. Moreover, a better understanding of moral distress may help retain staff nurses.