Background According to the literature, academic stress, academic self-efficacy, and self-compassion are the most effective variables that affect nursing students' psychological health and learning engagement. This study aimed to examine the relationship between self-compassion, academic stress, and academic self-efficacy among undergraduate nursing students. Methods We conducted this descriptive cross-sectional study in 2024 using convenience sampling to recruit nursing students. The study involved 200 nursing students from three Iranian universities of medical sciences. Data for the study were collected using demographic questionnaires, Self-Compassion Scale-Short Form (SCS-SF), and Academic Self-Efficacy and Stress Scale. Results The mean score of academic stress, academic self-efficacy, and self-compassion was 78.39 +/- 47.27, 180.99 +/- 53.43, and 42.29 +/- 8.58, respectively. There was a significant relationship between self-compassion and academic stress (r=-0.42, P < 0.001), self-compassion and academic self-efficacy (r = 0.57, P < 0.001), and academic self-efficacy and academic stress (r=-0.45, P < 0.001). Self-compassion was significantly associated with academic stress and academic self-efficacy of nursing students, such that with one unit increase in self-compassion score, the likelihood of having a low level of academic stress and having a high level of academic self-efficacy increased by 10% and 13%, respectively. Conclusion The outcomes of this study magnify the significance of implementing interventions that focus on enhancing self-compassion and academic self-efficacy among these students. This approach would effectively reduce perceived stress and its associated outcomes, ultimately leading to enhanced student experiences.