Abstract Background and aims Nursing students, as the future architects of healthcare delivery, routinely navigate ethically complex clinical environments that render them susceptible to moral disengagement. This self-regulatory cognitive process decouples internal moral standards from conduct, enabling individuals to rationalize unethical behavior without experiencing self condemnation. Despite its profound implications for patient safety and professional identity formation, the concurrent contributions of erosive occupational factors such as emotional exhaustion and salutogenic personal resources such as psychological well-being remain insufficiently explored in this population. This study therefore sought to disentangle the predictive roles of psychological well-being and emotional exhaustion in moral disengagement among senior nursing students. Methods This descriptive cross-sectional study was conducted in 2025 among 203 final year nursing students recruited through census sampling from Qazvin University of Medical Sciences in northwestern Iran. Participants completed a demographic information checklist alongside three validated instruments: Fida’s Moral Disengagement Scale, Rutherford’s Emotional Exhaustion Scale, and Ryff’s Scales of Psychological well-being. Given the nested structure of the data (four moral disengagement subscales per student), data were analyzed using Generalized Estimating Equations (GEE) with robust (Huber‑White) standard errors to account for within‑subject correlations, with the exchangeable working correlation structure selected as the optimal fit following comparison with alternative structures. Results The mean scores for moral disengagement, emotional exhaustion, and psychological well‑being were 44.87 (SD = 12.29), 12.17 (SD = 3.98), and 69.12 (SD = 9.73), respectively. The GEE analysis revealed that emotional exhaustion (β = 0.461, p < 0.001) and male gender (β = 0.236, p < 0.001) emerged as the strongest positive predictors of moral disengagement. Personal growth demonstrated a significant protective effect (β = -0.195, p = 0.005), while purpose in life showed a protective trend (β = -0.143, p = 0.054). Other dimensions of psychological well-being, including autonomy, environmental mastery, positive relations with others, and self-acceptance, did not show significant independent effects. A significant interaction was observed between emotional exhaustion and moral disengagement subscales (Wald χ² = 52.356, p < 0.001), indicating that emotional exhaustion had the strongest effect on agency distortion (Β = 0.494, p < 0.001). The model demonstrated excellent fit (Omnibus test: χ² = 99.183, p < 0.001; QIC = 7866.058). Conclusion Emotional exhaustion constitutes a potent risk factor for moral disengagement, particularly through the agency distortion mechanism, while personal growth serves as a significant protective buffer. Educational and organizational interventions that systematically target emotional exhaustion while nurturing personal growth and a coherent sense of purpose may substantially mitigate moral disengagement among nursing students, ultimately fostering a more ethically resilient future workforce.