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Abstract (summary): The vagaries of the postmodern world present a moral dilemma for school administrators, acting in the face of increasing moral confusion and ambiguity. Frequently, a plethora of confusing and conflicting values preclude the determination of any clear choice, action or decision. Daily, school administrators confront moral and ethical dilemmas which demand a response. How do school principals actually respond to moral and ethical dilemmas that they confront within their professional role? No less than other administrators, Catholic school principals are faced with taking action in a context characterized by moral and ethical ambiguity. Changes within the Church and society in recent decades have served to destabilize the once definitive Catholic values, beliefs and teachings. For school principals charged with the responsibility of developing and maintaining a distinctive Catholic culture, moral contradiction, conflict and uncertainty have become common place. Ironically, the Church and society have rising expectations of the moral authenticity of school leaders despite the widespread cultural, social and economic diversity which challenges and complicates the leadership task. The purpose of this study was to determine how principals in Catholic schools actually respond to moral and ethical dilemmas within their professional role. Through the use of hypothetical case scenarios and a consideration of actual situations, this study investigated how five Australian Catholic school principals respond to moral and ethical dilemmas. Principals were found to use a variety of responses including avoidance, suspending morality, creative insubordination, and their own personal morality. Although moral and ethical dilemmas occurred at the transrational level of values, principals chose from varying implicit and explicit values held at rational and transrational levels. Ultimately, the question of whose values prevail in the resolution of values conflict was linked to the degree of discretionary power held by the principal in particular situations. Contrary to the findings of some earlier studies, evidence collected suggested that school principals consistently operate from a clear moral framework which includes but is not restricted to the application of rational personal and professional values.