BACKGROUND: While many nursing programs in developed countries have implemented simulation-based education as a pedagogic method of teaching, implementation of simulation in developing countries like Tanzania is rare. Traditional methods of auditorium lectures are widely conducted in low-income nursing and midwifery education institutions. Such pedagogy provides students with theoretical knowledge yet with limited hands-on exposure for clinical skills, which might affect the professional integration of students and quality care delivery. This study explored perceptions of simulation-based education among diploma nursing students and midwifery students in one of the urban nursing schools in Tanzania. METHOD: An exploratory qualitative study design was employed. Thirty-four nursing and midwifery students who had experience with simulation-based education were selected purposively to participate in focus group interviews. Data was collected in July 2023. Data analysis was conducted based on Graneheim and Lundman's content analysis approach. RESULTS: Two major themes emerged from the analysis: (1) Strengthened confidence through practice in a safe teaching environment. This theme included three sub-themes: (i) Increased overall confidence, (ii) reduced fear through practice in a safe environment, and (iii) enhanced knowledge and skills in procedures and equipment. The second theme was as follows: (2) Enhanced critical thinking and reasoning in debriefing and included two sub-themes: (i) Integrating theory into practice, (ii) communication in neonatal emergency management. CONCLUSION: Nursing and midwifery students perceived simulation-based education as an effective method to prepare for clinical practice and quality neonatal care. Introducing simulation-based education in nursing education may benefit students' learning and strengthen the sustainability of skilled healthcare providers in low-income contexts where resources are scarce. Further research is needed to assess whether students can transfer knowledge into clinical skills practice.