First-line nurse managers have experienced an unprecedented shift in their roles and responsibilities as a result of health care reform. Consequently, there is a need to identify competencies required of first-line nurse managers in a changing health care environment. A descriptive, exploratory study of nurse managers in a western Canadian province was conducted using a combined quantitative and qualitative approach. The research instrument was comprised of three parts: a questionnaire that grouped five categories of competencies (technical, human, conceptual, leadership, and financial management); demographic data; and a critical incident technique that allowed the subjects to elaborate on a specific incident in their practice when they "performed at their best" as a manager. Findings revealed that nurse managers' need for knowledge and understanding was greater than their ability to implement managerial competencies. The exploration of competencies of first-line nurse managers has implications for curriculum development in leadership and management courses in nursing programs, as well as managerial development in health care agencies. Results will assist educators and administrators in addressing the changing needs of current and future nurse managers.