Nurses play a vital role in the healthcare system. Their job satisfaction and work engagement can significantly impact patient outcomes and the overall effectiveness and efficiency of the system. This research examines the role of work engagement as a mediating factor in the relationship between job satisfaction and psychological distress among nurses. A cross-sectional study was conducted in UAE hospitals. The study was performed between August and December 2022. The Utrecht Work Engagement Scale measured work engagement, while stress, anxiety, and depression were measured using the Depression Anxiety and Stress Scales (DASS-21). The findings show significant (p< 0.05) relationships between psychological distress, work engagement, and job satisfaction. The structural equation modeling shows that work engagement mediated the relationships between psychological distress and job satisfaction (indirect effect 0.000, p< 0.001; direct effect −0.283, p< 0.001; total effect 580, p< 0.001) and between psychological distress and job satisfaction (indirect effect 0.000 p < 0.01; direct effect −0.226, p< 0.001; total effect − 0.509 p< 0.001). Nursing policies and healthcare organizations should promote resilience, work engagement, and job satisfaction among nurses. Doing so can improve nurses’ overall health and well-being, leading to better patient outcomes and a more efficient healthcare system.