Despite ongoing discussions about the promises and perils of temporary agency employment, we lack a systematic understanding of its potential to satisfy basic psychological needs in essential occupations such as nursing. While some studies suggest that temporary agency nursing satisfies the need for autonomy, others indicate that it frustrates the needs for competence and relatedness. Previous research has rarely addressed factors influencing the choice of temporary agency employment, which could also confound its effect on psychological need satisfaction. This leaves it unclear whether this employment arrangement provides the expected advantages and disadvantages. To compare temporary nurses (n = 116) with permanent nurses (n = 421) while controlling for potential confounders, we analyzed cross-sectional survey data using a combination of propensity score matching and parametric and non-parametric group comparisons. In 105 matched pairs, we found no evidence for higher levels of satisfaction of the need for autonomy or lower levels of satisfaction of the need for competence among temporary nurses. However, we found evidence of lower levels of satisfaction of the need for relatedness among temporary nurses. This finding suggests that future research should investigate team dynamics among temporary and permanent nurses.