© 2015 Australian College of Mental Health Nurses Inc. Historically, mental health services have faced challenges in their ability to attract and retain a competent nursing workforce in the context of an overall nursing shortage. The current economic downturn has provided some respite; however, this is likely to be a temporary reprieve, with significant nursing shortages predicted for the future. Mental health services need to develop strategies to become more competitive if they are to attract and retain skilled nurses and avoid future shortages. Research demonstrates that creating and maintaining a positive nursing practice environment is one such strategy and an important area to consider when addressing nurse retention. This paper examines the impact the nursing practice environment has on nurse retention within the general and mental health settings. Findings indicate, that while there is a wealth of evidence to support the importance of a positive practice environment on nurse retention in the broader health system, there is little evidence specific to mental health. Further research of the mental health practice environment is required.