In acute hospital settings, medical trainees are often confronted with moral challenges and negative emotions when caring for complex and structurally vulnerable patients. These challenges may influence the long term moral development of medical trainees and have significant implications for future clinical practice. Despite the importance of moral development to medical education, the topic is still relatively under-explored. To gain a deeper understanding of moral development in trainees, we conducted a qualitative exploration of how caring for a stigmatized population influences their moral development. Data were collected from 48 medical trainees, including observational field notes, supplemental interviews, and medical documentation from inpatient units of two urban teaching hospitals in a Canadian context. Utilizing a practice-based approach which draws on constructivist grounded theory, we conducted constant comparative coding and analysis. We found that caring for stigmatized populations appeared to trigger frustration in medical trainees, which often perpetuated feelings of futility as well as avoidance behaviours. Additionally, hospital policies, the physical learning environment, variability in supervisory practices, and perceptions of judgment and mistrust all negatively influenced moral development and contributed to apathy and moral detachment which has implications for the future. Recognizing the dynamic and uncertain nature of care for stigmatized patients, and addressing the influence of structural and material factors provide an opportunity to support moral experiences within clinical training, and to improve inequities.