Work‐based learning has the potential to transform health care services to improve patients' and users' experiences, support the implementation of evidence, provide value for money, improve productivity and achieve continued modernization. This article describes the findings from a literature‐based concept analysis that explored a contemporary understanding of work‐based learning relevant to modern health care practice and education. Many descriptions of work‐based learning exist but it is difficult to define the concept in a way that practitioners can understand and relate to in their daily working lives. The article identifies the distinguishing attributes of work‐based learning, together with its enabling factors and consequences. From this literature‐based concept analysis, it is concluded that work‐based learning is a process that concentrates on how learning takes place within the workplace. It is stimulated by workplace activities that engage the learner in discussion and debate with workplace colleagues. This critical dialogue, if facilitated and adequately resourced, can trigger a transformation of workplace culture into one that captures situated learning to enhance not only the individual, but also team and even organizational working practices. Copyright © 2009 John Wiley & Sons, Ltd.