This manual for elementary school teachers discusses the stages of social reasoning and suggests methods for establishing a classroom and school-wide community to aid students in social reasoning and self-governance. The document contains five sections. Section one focuses on the stages of social reasoning according to William Damon: premoral reasoning (ages 3-5), punishment-reward reasoning (ages 5-8), moral relativity (ages 8-12), and mutual expectations (ages 11-17). Part II introduces the dilemma story approach as an initial means for students to explore ethical questions. Following an example of a dilemma story, the teaching process is outlined. It includes confronting the dilemma, identifying the best action, reasoning, and reflection. Students work out their solutions in groups. Section three, Creating a Classroom Community, discusses ethical questions in the daily operation of the classroom. The section also identifies three phases for establishing a classroom community. Phase one involves a three-week training program; in phase two, students organize into small club groups. Phase three involves twice-a-week meetings and continues throughout the year. Section IV identifies the roles of the teacher as designer, implementer, and promoter in the classroom community. The final section extends classroom community concepts to the school level and focuses on the role of the principal. (KC)