We investigated whether compassion fatigue mediated associations between nurse stress exposure and job satisfaction, compassion satisfaction, and burnout, controlling for pre-existing stress. The Life Events Checklist was administered to 251 novice pediatric nurses at the start of the nurse residency program (baseline) and 3 months after to assess pre-existing and current stress exposure. Compassion satisfaction, compassion fatigue, and burnout were assessed 3 months after baseline and job satisfaction 6 months after. Stress exposure significantly predicted lower compassion satisfaction and more burnout. Compassion fatigue partially mediated these associations. Results demonstrate a need for hospitals to prevent compassion fatigue in healthcare providers.