This study tested a moderated-mediation model of the processes linking principal ethical leadership and professional learning communities in China, in which teacher obligation is included as a mediator, and teacher participation in school decision making is considered as a moderator. The results from 3374 teachers revealed significant direct and indirect effects of ethical leadership on the professional learning communities via teacher obligation. Teacher participation in decision making significantly moderated the effects of ethical leadership on both teacher obligation and on the professional learning communities. The positive effects of principal ethical leadership were strengthened when teachers perceived high participation in school decision making.