Aim This study examines the factors that mediate and moderate the relationships of perceived organizational support with work engagement and organization citizenship behaviour. Specifically, affective commitment is posited to mediate and psychological contract breach to moderate the above relationships. Background Nurses play a critical role in delivering exemplary health care. For nurses to perform at their best, they need to experience high engagement, which can be achieved by providing them necessary organizational support and proper working environment. Design Data were collected via a self‐reported survey instrument. Methods A questionnaire was administered to a random sample of 750 nurses in nine large hospitals in India during 2013–2014. Four hundred and seventy‐five nurses (63%) responded to the survey. Hierarchical multiple regression was used for statistical analysis of the moderated‐mediation model. Results Affective commitment was found to mediate the positive relationships between perceived organizational support and work outcomes (work engagement, organizational citizenship behaviour). The perception of unfulfilled expectations (psychological contract breach) was found to moderate the perceived organizational support–work outcome relationships adversely. Conclusion The results of this study indicate that perceived organizational support exerts its influence on work‐related outcomes and highlight the importance of taking organizational context, such as perceptions of psychological contract breach, into consideration when making sense of the influence of perceived organizational support on affective commitment, work engagement and citizenship behaviours of nurses.