Limit setting is an intervention that is frequently used by mental health nurses. However, limit setting is poorly conceptualized, its purpose is unclear, and there are few evidence-based guidelines to assist nurses to set limits in a safe and effective manner. What is known is that the manner in which nurses set limits influences patients' perceptions of the interactions and their emotional and behavioural responses. In this qualitative study, 12 nurses and 12 patients participated in personal, semistructured interviews that aimed to explore limit setting and to propose principles to guide practice. The findings suggested that: (i) limit setting is important to safety in mental health hospitals; (ii) engaging patients in an empathic manner is necessary when setting limits (when nurses engage in an empathic manner, the therapeutic relationship is more likely to be preserved and the risk of aggressive responses is reduced); and (iii) an authoritative (fair, respectful, consistent, and knowledgeable), rather than authoritarian (controlling and indifferent), limit-setting style enhances positive outcomes with regards to adherence, reduced likelihood of aggression, and preservation of the therapeutic relationship. In conclusion, a limit-setting style characterized by empathic responding and an authoritative, rather than authoritarian interpersonal, style is recommended. Elucidating the components of this style is critical for effective training and best practice of mental health nurses, and to reduce aggressive responses from limit setting.