Edward de Bono who invented the term "lateral thinking" in 1967 is the pioneer of lateral thinking. Lateral thinking is concerned with the generation of new ideas. Liberation from old ideas and the stimulation of new ones are twin aspects of lateral thinking. Lateral thinking is a creative skills from which all people can benefit enormously. The present study was probed to find the lateral thinking of prospective teachers with certain demographic variables. Data for the study were collected using self-made Lateral Thinking Questionnaire (LTQ). The investigator used stratified random sampling technique. The sample consists of 1345 prospective teachers who studied in Tirunelveli, Thoothukudi and Kanyakumari Districts in Tamil Nadu. For analyzing the data percentile analysis, "t" test and ANOVA were used as the statistical techniques. Findings show that (1) the level of lateral thinking of prospective teachers are moderate (2) there is significant difference between male and female prospective teachers in their lateral thinking and its dimensions description, humour, insight and problem solving (3) there is no significant difference between rural and urban prospective teachers in lateral thinking and its dimensions description, humour, insight and problem solving (4) there is significant difference among the subject of language, arts and science prospective teachers in lateral thinking and its dimensions description, humour, insight and problem solving.