This study applied an economic framework to the analysis of public health nurse (PHN) salaries, assessing their relationships to nurse qualifications, agency resources, community economic base, and area competition for the nurse supply. Data were obtained through interviews with 125 Ohio health departments and from various state and local reports. Associations between salaries and explanatory variables were analyzed through correlations and stepwise regression models. The PHN salaries were significantly lower and more compressed than salaries for nurses in area hospitals. Agency and community characteristics were more important than nurse education and experience in explaining salary variations. Maximum PHN salary attainable was significantly related to level of health department funding and community unemployment rate. Health departments in rural locations paid lower salaries at both minimum and maximum levels. Evidence suggested the presence of entry-level wage competition by health departments with both area hospitals and other community nursing agencies. Each 1% increase in minimum hospital nurse salaries was linked to a 0.66% increase in PHN salaries. Findings support the need to improve competitive positions of health departments as nurse shortages intensify.