Background: Clinical competence is a key outcome in nursing education, potentially linked to students' psychological factors, including self-efficacy and learning motivation. However, the role of learning motivation in explaining the relationship between self-efficacy and clinical competence warrants further investigation. Objective: To analyze the relationships between self-efficacy, learning motivation, and clinical competence, and to examine the role of learning motivation as a mediator in the relationship between self-efficacy and clinical competence among Diploma III Nursing students in the border region between Indonesia and Timor-Leste (RI–RDTL). Methods: This quantitative, analytical, cross-sectional study involved 167 Diploma III Nursing students undergoing clinical practicum. Participants were selected using proportional sampling. Self-efficacy was measured using the General Self-Efficacy Scale (GSES), learning motivation was assessed via a clinical learning motivation instrument, and clinical competence was evaluated based on clinical practicum grades. Data were analyzed using Spearman correlation and mediation analysis. Results: Self-efficacy showed a positive and significant correlation with learning motivation (ρ = 0.485; p < 0.001). The relationships between self-efficacy and clinical competence (ρ = −0.113; p = 0.145) and between learning motivation and clinical competence (ρ = −0.051; p = 0.516) were not statistically significant. The indirect effect was found to be −0.025 and was also not significant. Conclusion: Learning motivation was not found to mediate the relationship between self-efficacy and clinical competence. Enhancing clinical competence requires strengthening psychological factors and improving the quality of clinical learning.