Background <p>Compassion fatigue is a significant concern for nurses because they are constantly exposed to suffering. This study aimed to develop and validate a Compassion Fatigue Assessment Scale for Indian nurses.</p> Methods <p>A quantitative, descriptive, and cross-sectional design was used to evaluate the psychometric properties, including the validity and reliability of the developed tool. A total of 200 nurses from two government and two private hospitals participated in the study between February and June 2022. Data were collected using a sociodemographic sheet, the Compassion Fatigue Assessment Scale, and the Professional Quality of Life Scale. Construct validity was assessed using principal component analysis, followed by examination of inter-domain correlations, while convergent validity was established using the Professional Quality of Life Scale. Reliability was tested using Cronbach’s α.</p> Results <p>Principal component analysis with varimax rotation identified a ten-factor structure across the 36 items, explaining 60.34% of the variance. The extracted domains included “dissatisfaction and burnout,” “lack of emotions and sensitivity”, “lack of interest,” “secondary stress”, “hopelessness,” worthlessness, “overwhelming,” “lack of compassion”, “incompetency,” and “lack of productivity.” The overall Cronbach’s alpha was 0.88, with the subscale scores ranging from 0.70 to 0.91. The test–retest intra-class correlation coefficient was 0.93, indicating good stability.</p> Conclusions <p>The Compassion Fatigue Assessment Scale demonstrated strong construct validity and internal consistency, making it a reliable tool for assessing and monitoring compassion fatigue among Indian nurses in research and professional settings.</p>