Mental health challenges represent a growing global burden that significantly affects patient outcomes, workforce wellbeing, and healthcare system performance. Nurses play a pivotal role in addressing these challenges due to their continuous patient contact, holistic care approach, and presence across diverse healthcare settings. This integrative review aims to synthesize existing evidence on the role of nursing in addressing mental health challenges, with a focus on nursing-led interventions, patient outcomes, and system-level impacts. An integrative review methodology was employed to analyze empirical studies, reviews, and policy-oriented literature published in recent years across multiple healthcare contexts, including acute care, primary care, community health, and long-term care settings. The findings indicate that nursing interventions—such as early mental health screening, therapeutic communication, crisis intervention, patient education, and continuity of care—are consistently associated with improved mental health outcomes, enhanced patient satisfaction, and reduced service fragmentation. Additionally, evidence highlights the reciprocal relationship between nurses’ psychological wellbeing and care quality, underscoring the importance of organizational support and workforce resilience. At the system level, effective integration of mental health within nursing practice contributes to improved care coordination, efficiency, and sustainability. This review underscores the critical role of nursing in advancing mental health care and calls for strengthened policy, education, and organizational strategies to support nursing-led mental health initiatives.