Abstract Background The current study investigated the relationship between behavioural and psychological symptoms of dementia (BPSD) knowledge and positive aspects of caregiving (PAC), in addition, how caregiving attitude and self-efficacy mediate or moderate this relationship. Methods Two hundred twenty-nine formal caregivers (51males and 178females) who has worked in nursing homes for more than a month were recruited.With a cross-sectional, face-to-face survey, structural questionnaires were implemented to evaluate formal caregiver’s BPSD knowledge, attitude, self-efficacy and PAC.A 13-item self-developed questionnaire was used to assess caregiver’s BPSD knowledge about disease characteristics, care and risks, and treatment needs. Dementia attitude, self-efficacy and positive aspects of caregiving were measured by dementia attitude scale, the General self-efficacy scale, and Chinese version of positive aspects of caregiving respectively. Model 5 in the PROCESS micro was employed in order to verify the mediating effect of attitude and the moderating effect of self-efficacy on the relationship between BPSD knowledge and PAC. Results The results showed that greater BPSD knowledge was associated with increased PAC, and this relationship was fully mediated by increased friendly attitude toward people with dementia. Moreover, direct effect was moderated by self-efficacy, and that only among those with high self-efficacy, the direct effect of BPSD knowledge was found on promoting PAC. Conclusions By elucidating the knowledge-attitude-practice pathway in handling patient’s BPSD, the current study extends existing literature and provides insights for developing psychoeducation programs among formal caregivers.