Human beings are social animals who want to live together to stabilize themselves. This results in the creation of family institution. Family is the first socializing agency for children and the most important institution which has a strong influence on the overall development of its members. There are various types of families, but, the most important and most prevalent of all are nuclear and joint families. Both nuclear and joint families have a strong influence on the overall development of students of all levels. But, elementary students are more prone to the family system variables. Therefore, the study investigated the effect of nuclear and joint family system on the moral development of elementary students. Nuclear family is a type of family in which there are husband, wife and their unmarried children, whereas, in joint family, there are husband, wife, their married and unmarried children and sometimes the in-laws. The objectives of the study were: (i) to investigate the effect of nuclear and joint family systems on the moral development of elementary students; (ii) to find out the effect of gender on the moral development of elementary students belonging to the nuclear and joint family systems; (iii) to explore the effect of rural and urban locations on the moral development of elementary students of nuclear and joint family systems; and (iv) to determine the effect of family size on the moral development of elementary students from nuclear and joint family systems. All the 222,944 elementary students, both boys and girls of the five districts of Khyber Pakhtunkhwa i.e. Dir Lower, Malakand, Mardan, Haripur and Dera Ismail Khan constituted the population of the study. A sample of 384 elementary students was randomly selected through cluster sampling. Kohlberg’s Moral Judgment Interview Form A was used to collect data from the sample of the study. xvi The collected data were analyzed through percentage, t-test and analysis of variance (ANOVA). The findings of the study rejected the proposed hypotheses. The results revealed that there were significant correlations among major variables of the study. Family system was found to have significant influence on the moral development of elementary students. The elementary students of joint families were morally better than their counterparts from nuclear families. The gender of elementary students had significant effect as far as the moral development of elementary students was concerned. The students of rural areas were morally more developed than those of urban areas. Similarly, students from large family size were morally better than those of small sized families. On the basis of conclusions, it was recommended that parents should give more attention and time to their families, especially, to the nuclear families in order to improve the moral standards of their children.