Although nursing leadership roles have been greatly transformed as a result of dramatic changes within healthcare over the past decade, there is little research on the nature of nurse manager work life in current work environments. The purpose of this study was to test a theoretical model derived from Kanter's theory of organizational empowerment: linking nurse managers' perceptions of structural and psychological empowerment to burnout, job satisfaction and physical and mental health. A descriptive, correlational design was used in a sample of 286 first-line (n=202) and middle-level (n=84) hospital-based nurse managers obtained from a provincial registry. Ironically, managers reported high levels of burnout, but good mental and physical health. Middle managers were more empowered and satisfied with their jobs than first-line managers. In both groups, approximately 45% of the variance in job satisfaction and 18-52% of the variance in physical and mental health was explained by empowerment and burnout. Empowered work environments were associated with lower nurse manager burnout and better physical and mental health. The results suggest that creating work environments that provide access to empowerment structures may be a fruitful strategy for creating healthy work environments for nurse managers.