Professional nurses across Canada are being affected by health reform initiatives designed to deinstitutionalize the health care system. This panel study examined the impact this restructuring has had on nurses' overall job satisfaction as well as their satisfaction with various aspects of their job and work environment. The participants consisted of 345 nurses employed in 3 community hospitals in southwestern Ontario. Hospital downsizing had relatively little effect on overall job satisfaction, satisfaction with kind of work, amount of work, and physical work conditions. However, compared to before the downsizing, nurses reported a significant deterioration in satisfaction with their career future, hospital identification, supervision, and co-workers following the implementation of restructuring initiatives. We discuss the organizational and management implications of these findings and suggest ways that hospital administrators can minimize the negative effects of downsizing on nursing professionals.