Objective: To explore the effect of dignity therapy combined with family narrative therapy in palliative care for terminal cancer patients. Methods: A total of 120 terminal cancer patients receiving palliative care were selected as the study subjects. According to different care methods, they were divided into an intervention group (n=60) and a control group (n=60). The control group received standard palliative care, while the intervention group received dignity therapy combined with family narrative therapy in addition to standard care, over a 4-week intervention period. Pain levels, death attitudes, sleep quality, and quality of life were assessed and compared between the two groups before and after the intervention. Results: After 4 weeks of intervention, scores in the American Pain Society Patient Outcome Questionnaire-Revised (APS-POQ-R) dimensions of pain intensity, pain beliefs, and impact of pain on life were lower in the intervention group compared to the control group (P<0.05), while the pain control satisfaction score was higher (P<0.05). In the Death Attitude Profile-Revised (DAP-R), scores for fear of death and death avoidance were lower in the intervention group (P < 0.05), whereas scores for natural acceptance, approach acceptance, and escape acceptance were higher (P < 0.05). The intervention group also showed lower scores in the Pittsburgh Sleep Quality Index (PSQI) dimensions of sleep quality, sleep latency, sleep duration, sleep efficiency, sleep disturbances, daytime dysfunction, and total PSQI score (P < 0.05). Furthermore, scores in the World Health Organization Quality of Life-BREF (WHOQOL-BREF) domains of physical health, psychological health, social relationships, and environment were higher in the intervention group (P<0.05). Conclusion: The application of dignity therapy combined with family narrative therapy in palliative care for terminal cancer patients can effectively alleviate pain levels, improve attitudes towards death, and enhance both sleep quality and overall quality of life.