OBJECTIVE To test a causal model of the impact of (a) nursing unit context on professional nursing practice; (b) professional practice on selected organizational (nurses' work satisfaction, nursing turnover, average length of patient stay) and patient outcomes (patient satisfaction, rate of reported medication errors, and falls); and (c) nursing unit context on these same organizational and patient outcomes. BACKGROUND Professional nursing practice has been linked to positive outcomes for both nurses and patients. In contrast to other studies, this study focuses on professional nursing practice specifically at the nursing unit level, and uses a new analytic technique that permits examination of the simultaneous effects of professional nursing practice on both organizational and patient outcomes. METHODS Data were collected from 1682 registered nurses, and 1326 patients on 124 general medical-surgical nursing units in 64 general short-term acute care hospitals in the southeast. Multilevel structural equation modeling was used to analyze the data. RESULTS We found that professional nursing practice had consistent effects across model levels on nursing satisfaction, but very limited effects on other outcomes. Important differences in the hospital- and nursing unit level models support continued use of multilevel modeling techniques in the study of organizational and patient outcomes.