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Background: Perceived constraints to providing patient care in their own morally justified way may cause moral distress (MD) in neonatal nurses and physicians. Negative long-term effects of MD include substandard patient care, burnout and leaving the profession., Aim: To assess the immediate impact of perceived inappropriate patient care on nurses' and physicians' MD intensity, and explore a possible moderating effect of ethical climate., Design: In a repeated measures design, after baseline assessment, each participant completed self-report questionnaires after five randomly selected shifts. Data were analysed with logistic and Tobit regression., Participants: Data were collected among 117 of 147 eligible nurses and physicians (80%) in a level-III neonatal intensive care unit in the Netherlands., Results: At baseline, overall MD was relatively low; in nurses, it was significantly higher than in physicians. Few morally distressing situations were reported in the repeated measurements, but distress could be intense in these cases; nurses' and physicians' scores were comparable. Physicians were significantly more likely than nurses to disagree with their patients' level of care (p = 0·02). Still, perceived overtreatment, but not undertreatment, was significantly related to distress intensity in both professional groups; ethical climate did not moderate this effect. Substandard patient care due to lack of continuity, poor communication and unsafe levels of staffing were rated as more important causes of MD than perceived inappropriate care., Conclusions: Although infrequently perceived, overtreatment of patients caused considerable distress in nurses and physicians. Our unit introduced multidisciplinary medical ethical decision making 5 years ago, which may partly explain the low MD at baseline., Relevance to Clinical Practice: MD might be prevented by improved continuity of care, safe levels of staffing and better team communication, along with other targeted interventions with demonstrated effectiveness, such as palliative care programs and facilitated ethics conversations., (© 2015 British Association of Critical Care Nurses.)