The present research was conducted to compare children studying in private and public schools in Pakistan on forgiveness and moral values. It was hypothesized that the type of school and gender of the child are likely to affect forgiveness and moral values in children. A sample of 100 children with equal number of girls and boys was recruited from private and public schools of Lahore, Pakistan. Tendency to Forgive scale (Brown, 2003), Attitude towards Forgiveness (Berry et al., 2001) and the Moral Development Measure (Ziv, 1976) were used for assessment. Analysis revealed that type of school and gender only showed main effects on moral values and forgiveness. Children from private school and girls had higher tendency to forgive, had better attitude towards forgiveness and high morality as compared to public school children. Findings have important implications for public sector school systems with regard to their role in moral development of children in Pakistan.