AIM: This study aimed to examine the effect of laughter yoga applied before simulation training on state anxiety, perceived stress levels, self-confidence and satisfaction in undergraduate nursing students. BACKGROUND: Clinical simulation-based teaching implied a revolution in nursing education. Along with the many opportunities that simulation offers, some disadvantages, such as anxiety and stress experienced during simulation scenarios, could affect students' satisfaction and self-confidence in learning. Therefore, laughter yoga could be an alternative method that reduces students' anxiety and stress levels and increases their self-confidence and satisfaction with simulation training. DESIGN: The study was designed as a pragmatic randomized controlled trial. SETTING: This study was conducted at a university in Turkey. PARTICIPANTS: A total of 88 undergraduate nursing students were randomized to the intervention group (n = 44) or control group (n = 44). METHODS: The intervention group participated in the laughter yoga sessions just before the clinical simulation scenario, while the control group only performed the simulation training. The researchers examined the effect of laughter yoga on state anxiety, perceived stress levels, self-confidence and satisfaction in learning before and after the intervention. Data were collected between January - February 2022. RESULTS: This study showed that the mean scores of state anxiety, perceived stress, mean pulse rate and arterial pressure of the intervention group were significantly lower than those of the control group (p < 0.05). In addition, there was also a significant group*time interaction between the groups on state anxiety, perceived stress, pulse, respiratory and mean arterial pressure scores (p < 0.05). Moreover, the mean scores of student satisfaction and self-confidence in the learning of the intervention group were significantly higher than those of the control group (p < 0.05). CONCLUSION: The findings showed that laughter yoga helped nursing students reduce their state anxiety and perceived stress levels related to simulation training and improved their self-confidence and satisfaction with learning. Additionally, it enhanced the students' vital signs (including mean pulse rate and mean arterial pressure). These positive results are promising for using LY as an easy, safe and effective method to reduce undergraduate nursing students' stress and anxiety levels and to improve their learning satisfaction and self-confidence levels in clinical skills training such as simulation training.