INTRODUCTION: Nursing students experience considerable amount of stress to meet their professional demands. Yoga is an effective practice to reduce stress and improve psychological well being. However, improvement in psychological well being aids in stress management. AIM: To evaluate the effectiveness of eight week yoga intervention on psychological functioning of nursing students. MATERIALS AND METHODS: This was a randomised Wait List Control (WLC) trial, we recruited total 100 students from Kempegowda Institute of Nursing, Bengaluru, Karnataka, India and randomized them into two groups (yoga=50 and WLC=50 students). The following instruments were used to collect the data, Freiburg Mindfulness Inventory (FMI), Self-Compassion Scale- Short Form (SCS-SF), Connor-Davidson Resilience Scale (CD-RISC), Satisfaction with Life Scale (SWLS), Jefferson Scale of Empathy HPS-Version (JSE-HPS), and Perceived Stress Scale (PSS). Data was analysed using Repeated Measures Analysis of Variance (RM-ANOVA) followed by post-hoc Bonferroni correction for all psychological variables. RESULTS: The results of our study report that eight week yoga intervention was significantly effective in improving self compassion and mindfulness among nursing students in experimental group than compared to WLC group. Even though there were improvements in resilience, satisfaction in life and perceived stress, results were not statistically significant. CONCLUSION: Overall, results of the present study have demonstrated impact of eight week yoga intervention on the psychological functioning of nursing students. Yoga intervention can be inculcated in the nursing education to meet demands of the profession.