Abstract: This literature review critically examines contributing factors to the current nursing shortage in New Zealand, centering on recruitment and retention of registered nurses. There is a dramatic widening between the supply of registered nurses and the demand for their services. All regions in New Zealand are reporting difficulty in hiring experienced and specialty nurses, and recruiting time is lengthening. This report suggests that the shortage is closely linked to factors in the nursing care environment. As a result of multiple factors during the centralising, cost-containing, acuity-increasing decade of the 1990s, the care environment has driven practising nurses out of acute care settings and discouraged new students from entering the profession. The availability of numerous alternative career opportunities has heightened the effect. Continuing causes to the non-selection of nursing as a profession are the influences of wage compression and limited career progression over the lifetime of the nurse, and insufficient orientation and mentoring of new nurses. Recent changes in the health care system have gone unevaluated and without oversight by nursing regulatory agencies – a situation not in the best interests of patients or nurses. A number of both literature-supported and resourceful approaches, including recommendations towards addressing the nursing shortage are proposed in this review.