AIMS: The objective of this study was to provide empirical evidence on the relationships between psychological capital, job embeddedness and performance. This paper also seeks to present the theoretical development of psychological capital and job embeddedness in nursing research and their application to nursing practices. BACKGROUND: Psychological capital was recently identified as a core construct in the literature of positive psychology. However, there is considerably less evidence on its positive effects on job embeddedness and performance among nursing personnel. METHODS: Questionnaires were distributed to approximately 1000 nurses employed in five university hospitals in Heilongjiang province in China. Data were collected in november 2009. the response rate was 73·3%. structural equation modelling was employed to test the proposed relationships. FINDINGS: The results support the hypothesized model. This research outlined a strong relationship between the self-reported psychological capital, job embeddedness and performance of the nurses. The study findings suggest that improving the individual-accumulated psychological state of nurses will have a positive impact on their retention intention and job performance. CONCLUSIONS: These findings suggest that higher psychological capital increases the self-reported job embeddedness and performance of these nurses.