Purpose Much attention has been paid to the decline of empathy in medical students and to the growing literature on interventions to enhance empathy. However, these interventions are at the level of a formal curriculum, not addressing the hidden curriculum/learning environment. The purpose of this study is to investigate the relationship between the learning environment and students’ empathy in a Taiwanese medical school. Procedures We recruited 157 Taiwanese medical students to participate in the study. The learning environment was measured using 15 items from the Learning Environment Scale, and empathy was assessed using six items from the empathy scale of the Ko’s Mental Health Questionnaire. To examine the construct validity of the Learning Environment Scale, confirmatory factor analysis with a three-factor model (teacher-learner relationship, physician-patient relationship, and self-efficacy) was conducted. Next, Structural Equation Modeling was conducted, and the direct effect of learning environment specified by the three indicators. Results The three-factor model showed a good fit (Satorra-Bentler chi-square value = 117.77, df = 87, p = .0157; CFI = 0.983; RMSEA = 0.048; SRMR = 0.095). The correlations among the three factors imply three different dimensions. Cronbach’s alpha coefficients for teacher-learner relationship, physician-patient relationship, and self-efficacy subscales were 0.88, 0.67, and 0.69, respectively. The results indicated a good fit for the model (Satorra-Bentler chi-square value = 0.04, df = 4, p = .9998; CFI = 1.000; RMSEA = 0.000; SRMR = 0.049). The direct effect of learning environment on the degree of empathy was significant, and the learning environment explained 35% of the variance in empathy. The findings indicate that the better the learning environment perceived by medical students, the higher the degree of empathy they had. This study highlights the influence of hidden curriculum on students’ empathy, calling for future empathy intervention to go beyond the formal curriculum.