Background: There is emerging evidence that most nursing leadership learning occurs in practice and through social interactions. However, how this social process of learning takes place is not clear and there is limited information about how to support nursing leadership learning as it occurs in clinical settings. The purpose of this study was to increase understanding of the nature of leadership learning in nursing practice. It further aimed to discover the ways in which this type of learning is important to leadership development, and to determine how and why this is the case. Methods: Using a constructivist grounded theory approach, a total of 19 semi-structured interviews with 15 nurse managers were undertaken. Data analysis consisted of coding, constant comparison, memo writing, theoretical sampling and conceptualisation. Results: It was found that learning occurs by engaging in social interactions, as these interactions are converted into learning events. A four-stage process of learning was identified: Reflecting, discovering, deciding, and choosing. Moving through this process can give rise to changed behaviours and leadership development. Conclusion: Nurse managers should be supported by providing them with the opportunity to engage in the learning process by providing action learning sets, focusing on reflection.