The present investigation was conducted to identify relationship between moral atmosphere of school and moral development of secondary school students. An adapted and validated questionnaire (Cronbach alpha .795) was used to know the perceptions of students regarding moral atmosphere of school and one adopted interview inventory (Cronbach alpha 0.813) was used to assess the level of moral development of students. The sample of the study consisted of 1239 secondary school students. The subjects of the study were selected from seven districts of the Punjab province. Four schools were selected from each district. Two girls high schools and two boys high schools were selected randomly from one rural and one urban area of each district. Correlation was run to see the relationship between moral atmosphere of school and moral development of students. Major findings revealed that there was a significant relationship between moral atmosphere of school and moral development of students. It means the role of schools' moral atmosphere is significant in the development of students' morality. On the basis of findings, recommendations were made in the study.