Being a nurse is a very demanding job that might cause compassion fatigue. It is generally discovered that psychological capital plays a major role in improving nurses' ability to handle difficult situations and shielding them from compassion fatigue. Examine the consequences of this condition, including decreased job satisfaction, burnout, and compromised patient care. To address this issue, we discuss various intervention strategies, such as stress management techniques, counseling, and organizational changes. By understanding the causes and consequences of psychological exhaustion, we can implement effective measures to promote the well-being of mental health nurses and ensure high-quality patient care. Design: The study used a descriptive correlational design. Tools: A Personal and Job Data Sheet, the Secondary Traumatic Stress Scale, and the Psychological Capital Questionnaire were the two tools utilized to gather the required data. Findings: Of the nurses surveyed, less than two thirds (63.7%) reported having minor compassion fatigue, whereas more than three quarters (80.1%) reported having a moderate degree of psychological capital. In conclusion, it is evident that there is a statistically significant negative link between compassion fatigue and the overall psychological capital scores. Suggestions: Developing and implementing training programs on a regular basis to improve nurses' understanding of psychological capital, resilience, productive coping mechanisms, and stress-reduction techniques that might reduce the incidence of compassion fatigue.