Background Therapeutic communication is considered as a skill required for all health care workers in order to improve understanding the patient in a better manner and encouraging the patient to express feelings & ideas. It has also been accepted as a high standard of nursing care which is to be practiced at every hospital and nursing facility. As practice of therapeutic communication improves outcome of nursing care, objective of this study was to assess the level of knowledge, attitude and practice regarding therapeutic communication among nurses in teaching hospitals in the Kandy district, Sri Lanka. Specific objectives were to determine the factors affecting practice of therapeutic communication and to evaluate the self- satisfaction of therapeutic communication among participants. Methods A cross sectional study design was employed to gather data by a structured self-administered questionnaire involving 200 nurses working in teaching hospitals in Kandy, Sri Lanka. Results were analyzed by MINITAB version 18. Results Around 63.63% nurses were strongly favorable towards the fact that active listening is the most important part in therapeutic communication between patient and the nurse. The majority of participants were with the attitude that therapeutic communication prevents medical errors which could occur when treating patients. Fifty-nine percent of nurses always applied therapeutic communication in pre-operative & post-operative care. There was a statically significant association between socio-demographic variables and knowledge, attitudes and practice of therapeutic communication among the study population. Majority agree to promote the therapeutic communication in their clinical setting. However, increased workload at the hospital was named a barrier by many participants. Conclusions A statistically significant association exists between educational status,position & number of years in service and knowledge, attitude & practice of therapeutic communication. Active listening is considered the most important part in therapeutic communication which prevents medical errors of patients. Majority agree to promote the practice in their clinical setting, but consider that it would increase their workload. Findings reveal the necessity of introducing awareness programs and workshops preferably by the authorities concerned highlighting advantages of applying therapeutic communication in the nursing practice.