Simulation-Based Education has become an integral strategy in nursing education for enhancing clinical judgement capability. Yet the psychological mechanisms that mediate its effectiveness remain underexplored. Self-efficacy, a key construct in Bandura’s social cognitive theory, may explain how learners translate simulation experiences into improved clinical performance. This study examined the mediating role of self-efficacy the relationship between Simulation Based Education and Clinical Judgement Capability among final-year nursing students in Qatar. A quasi-experimental pretest-post-test design with correlational analysis was employed. A total of 200 final-year undergraduate nursing students participated in a high-fidelity simulation based on the National League of Nursing/Jeffries Simulation Theory. Data were collected using three validated instruments: the Clinical Judgement Capability Questionnaire, the Simulation Effectiveness Tool–Modified, and the Self-Efficacy in Simulation Questionnaire. Structural Equation Modelling with bootstrapping (5000 samples was used to test direct and indirect effects. Simulation Based Education significantly improved clinical judgement (t = 4.32, p < .001) and self-efficacy. Structural Equation Model results showed that Simulation Based Education positively impact Clinical Judgement Capability both directly (β = 0.17, p < .01) and indirectly through self-efficacy (β = 0.22, p < .001), confirming a partial mediation effect. The model accounted for 53.2% of the variance in CJC and demonstrated good fit (CFI = 0.911, RMSEA = 0.049). Self-Efficacy plays a significant mediating role in enhancing the impact of simulation on clinical judgement. Simulation programs should be designed not only to replicate clinical scenarios but also to strengthen learners’ confidence in their clinical abilities.