Different Ethical issues encountered in daily nursing practice draw little consideration but can produce a stressful working environment for the nurses. This qualitative study was designed to explore the ethical issues confronted by nurses in their practice and to identify gaps using the Pakistan Nursing Council’s (PNC) Ethical code framework. The study was conducted in six government hospitals of district Layyah, Pakistan. In all six focal group discussions (FGDs) with 6-8 participants in each were conducted. Content analysis identified three themes, namely; compromised professional accountability to patient, uncooperative behaviour of peers and poor image of a nurse in society. Nurses reported that they were unable to act on the PNC code fully because of many constraints in clinical practice. The reasons identified by the respondents were conflict in hospital admission procedures of patients, non-availability of medicines, conflict in informed and voluntary consent, false accusations by patients, care imbalance, compromised nursing care, and deficiency in amenities, patient’s expectations and cultural barriers. In addition, poor teamwork, inequitable workload, and poor value of nursing profession added to the challenges at the workplace. To our knowledge, this is the first study that has specifically addressed ethical issues in the nursing practice of graduate nurses in District Layyah. Nurses were aware about their ethical responsibilities but were unable to practice them because of the multiple constraints. The findings of this study cannot be generalized to other nurses in Pakistan, but the richness of the data suggests explanations for the difficulties which many nurses face in public sector health facilities while performing their duties and adhering to ethical principles in clinical practice.