Compassion fatigue is not a new concept in nursing; yet, it is not well known and there is no fixed clear definition of the term. The ambiguity surrounding how to define compassion fatigue has challenged its measurement and evaluation. Thus, any attempt to determine attributes of this underdeveloped concept and studying it in a new socio-cultural context requires concept development. The purpose of this study is to clarify the concept of compassion fatigue through concept development and to produce a vivid and tentative definition of this concept in clinical practice. Concept development was conducted using a three-step hybrid concept analysis including theoretical, fieldwork, and final analysis phases according to Schwartz-Barcott and Kim's method. We reviewed and analyzed 48 articles that met the inclusion criteria. Following, the first author conducted 13 interviews with clinical nurses followed by an inductive content analysis. Finally, a comprehensive definition of compassion fatigue in nurses was attained. Compassion fatigue in nurses can be explained as a cumulative and progressive process of absorption of the patient’s pain and suffering formed from the sympathetic and caring interactions with the patients and their families. The physical, emotional, intellectual, spiritual, social, and organizational consequences of compassion fatigue are so extensive that they threaten the existential integrity of the nurse. Context-based variables (culture, family, and community) such as personality features like devotion behaviors and commitment towards the patient, exposure to multiple stressors, organizational challenges, and lack of self-care are factors associated with an increased risk of compassion fatigue. Concept development of compassion fatigue is the first step in the protection of nurses against the destructive consequences of compassion fatigue and to improve quality of care.