Community-based care systems aim to enable people to live to the end of their lives in the community. Hospitals for community-based care, established in 2014, often provide dementia care with the aim of helping patients return to their own lives. For this reason, nursing professionals working in these hospitals are required to cultivate ethical standards and improve their care skills. The objective of this study was to investigate the moral sensitivity of nursing professionals working in hospitals for community-based care, as well as their knowledge of and attitudes toward dementia, and to identify associated factors. A questionnaire survey was administered to 208 nursing professionals in nine hospitals for community-based care in two prefectures, and 97 respondents were included in the analysis. The results of the analysis showed no association between moral sensitivity and knowledge of and attitudes toward dementia. There were weak associations of moral sensitivity with total years of work experience and whether or not the nurses had attended training courses on dementia nursing. Data also revealed that those with a “higher awareness of dignity” might also have a higher awareness of “helping patients live their own lives” and of “making the most of the abilities of the elderly”. Our results suggest that improving moral sensitivity requires training on dementia and ethics, ongoing ethics conferences, and creation of an environment that encourages awareness of ethics.