Background Given the widespread occurrence of ethical dilemmas and moral distress in healthcare, it is crucial for educators to strengthen nursing students' ethical education. However, there is little published research on the best practices for teaching nursing ethics. This study aims to determine whether the Presentation-Assimilation-Discussion (PAD) mode, compared to traditional lecture-based learning (LBL) teaching, increases nursing students' moral sensitivity and ethical decision-making skills. Methods A total of 100 eligible nursing students were randomized into two groups: the PAD model group (n = 50) and the LBL group (n = 50). Their moral sensitivity and ethical decision-making skills were evaluated using the Moral Sensitivity Questionnaire-Revised Chinese Version (MSQ-R-CV) and the Chinese Version of Judgment About Nursing Decision (JAND-CV), both before and after the course, and again three months later. Results After the course, the PAD group showed significantly higher scores in moral sensitivity and ethical decision-making compared to the LBL group, both immediately and at the 3-month follow-up (p < 0.05). Specifically, the PAD group demonstrated greater improvements in total scores and in most subdimensions, including moral responsibility, moral burden, ethical choice, and ethical action. While both groups showed some degree of improvement after the intervention, the changes were more substantial and longer-lasting in the PAD group. Conclusion This study confirms that the PAD model is an effective method for teaching nursing ethics and developing nursing students' moral sensitivity and ethical decision-making skills.