Schools are the best places which support students’ moral development. The purpose of this research study was to determine the effect of institutional climate on students ethical grooming. The sample comprised of sixty (60) heads, three hundred (300) SSTs and three hundred (300) students of Punjab School Education Department selected on a random basis. The questionnaires and interview schedule was used as tools of research. The research tools were piloted and validated before actual data survey. It was concluded that the institutional climate has a positive effect on ethical grooming of students. A large number of ethical traits like discipline, teamwork, time management, religious diversity, manners and etiquettes, cultural diversity, confidence, speaking skills, intellectual skills, attitude and leadership qualities flourished in the institutions. It is recommended that a society for developing students’ ethical grooming may be established at the school, district, division, provincial and state levels.