Objective Responding to emotional cues is an essential element of therapeutic communication. The purpose of this study is to examine nurses' competence of responding to emotional cues (CRE) and related factors while interacting with standardized patients with cancer. Methods This is an exploratory and predictive correlational study. A convenience sample of registered nurses who have passed the probationary period in southern Taiwan was recruited to participate in 15‐minute videotaped interviews with standardized patients. The Medical Interview Aural Rating Scale was used to describe standardized patients' emotional cues and to measure nurses' CRE. The State‐Trait Anxiety Inventory was used to evaluate nurses' anxiety level before the conversation. We used descriptive statistics to describe the data and stepwise regression to examine the predictors of nurses' CRE. Results A total of 110 nurses participated in the study. Regardless of the emotional cue level, participants predominately responded to cues with inappropriate distancing strategies. Prior formal communication training, practice unit, length of nursing practice, and educational level together explain 36.3% variances of the nurses' CRE. Conclusions This study is the first to explore factors related to Taiwanese nurses' CRE. Compared to nurses in other countries, Taiwanese nurses tended to respond to patients' emotional cues with more inappropriate strategies. We also identified significant predictors of CRE that show the importance of communication training. Future research and education programs are needed to enhance nurses' CRE and to advocate for emotion‐focused communication.