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Aim: We aim to investigate the interplay between moral distress and moral injury among nurses working in palliative and oncology wards and to assess its impact on nursing leadership. Background: The past 2 years have been particularly challenging for nurses and nursing leaders in Croatia. The coronavirus disease pandemic and the subsequent earthquakes in the country significantly impacted the work of nurses. Moral distress has been well‐known to nursing professionals, but recent studies warn about cofounding it with moral injury and their possible intercorrelation, deserving more attention from an empirical perspective. Methods: We conducted quantitative cross‐sectional research in palliative and oncology wards in 11 Croatian health care facilities on 162 nurses, using a questionnaire and paper/pencil method over 6 months (1 January 2021 to 1 July 2021). The questionnaire consisted of three parts: sociodemographic data, a Measure of moral distress for health care professionals and Moral injury symptoms scale for health care professionals. The research protocol was approved by the Ethics committee of the Catholic University of Croatia under no. 1‐21‐04. Results: The findings of our study demonstrated that the current average levels of moral distress might be characterized as low, but the moral injury symptoms are severe. The results of our study bring interesting novel insights, such as the strong correlation between moral distress and moral injury, but also in terms of nurses' decision to leave or consider leaving their position. The nurses who experience higher levels of moral distress experience severe symptoms of moral injury, while nurses who score higher in moral distress and moral injury have left, considered or consider leaving their positions. Conclusions: This study highlighted the need to pay attention to the emerging phenomenon of moral injury that has been unaddressed and overshadowed by moral distress, their intercorrelation, and the importance of addressing them timely and adequately within health care organizations with their leadership and management. Implications for Nursing Management: These findings provide a significant insight that may assist nursing managers and leaders to act and respond in time to develop various prevention and mitigation measures and help resolve situations leading to moral distress or moral injury. [ABSTRACT FROM AUTHOR]