The aim of this study was to critically analyse the impact of the ‘Leadership in Compassionate Care Programme’ and offer a conceptual model of factors that can embed compassionate care in contemporary health care environments. This three-year initiative (2008–2011) was designed to embed compassionate care in both practice and pre-registration education. Using a realistic evaluation approach this longitudinal qualitative study involved data collection in eight participating wards. The ‘level of adoption’ of the Programme varied across the wards, which pointed to key context and mechanisms that were influential in embedding compassionate care. Contextual factors that promoted adoption of the Programme were stability, support and leadership. The most important mechanisms were appreciative inquiry coupled with skilled facilitation. Powerful practice development techniques focused on articulating and demonstrating values; giving patients, relatives and staff a voice to express their experiences and emotions; and instituting effective feedback mechanisms. In the high adopting wards the main outcomes included personalisation of patient care, an increased sense of involvement for relatives and ‘caring conversations’ becoming an accepted part of working practice. Embedding and sustaining compassionate care demands strategic vision and investment in a local infrastructure that supports relationship-centred care, practice development and effective leadership at all levels.