Registered nurses (RNs) working in the NSW public sector in 1996 are matched to the hospital in which they work. We analyse their annual retention probability using personal and job characteristics along with hospital characteristics. The youngest nurses are most likely to leave although promotion at junior levels counteracts this effect. Generally, hours of work are positively related to retention. Hospital characteristics that positively affect retention include size, expenditures, emergency admissions and staffing levels. Negative conditions include workloads, complexity (ANDRG weight), and VMO expenditures. Surprisingly, we find no evidence of hospital-specific effects over and above hospital characteristics.