This study examined Taiwan and Mainland Chinese and Canadian children's concepts of, and moral judgments about, lying. Participants aged 7, 9 and 11 years in those locations were read stories involving child characters doing something good or bad, and telling a lie or the truth about their own deed. They were asked whether a story character's verbal statement was a lie or the truth, and whether the statement was good or bad. Results show that most children of both cultures labelled a lie as a lie, and the truth as the truth. The major cultural difference lay in children's moral evaluations of truth‐ and lie‐telling in the good deed conditions: for both Taiwan and Mainland Chinese children, as age increased, lying about one's own good deeds became increasingly positive, whereas truth‐telling about good deeds became less positive; for Canadian children, regardless of age, lying about good deeds was negative, and truth‐telling about a good deed was positive. This effect was because of Taiwan and Mainland Chinese children's increasing awareness of the need to be modest and self‐effacing in prosocial deed situations. We replicated the modesty effect of Lee, Cameron, Xu, Fu, and Board (1997) that only involved Mainland Chinese children. Given the major differences in political, economical and educational systems between Taiwan and Mainland China, the modesty effect is likely owing to children's socialization of Chinese traditional values in home and at school.