This paper is based on a participatory action research. The research is based on a process of resolving real-life moral dilemmas in the Moral Education classroom. It critically analyses the types of real-life moral dilemmas that a selected group of secondary students thought about. It also indicates the moral choices that they make based on their negotiation skills and cultural background. Participants in this study were twenty-two 16-17 year old adolescents from three different types of secondary schools in a Form Four Moral Education classroom in Malaysia. They were from different ethnic and cultural backgrounds, but within a non-Muslim community of students. Moral Education in Malaysia is designed to cater for this group while Muslim students study Islamic Studies. Findings show that students were concerned about moral issues and values that were relational and context dependent. Multiple factors contributed to the problems they described. These factors included national legislation, Malaysian culture, ethnicity, and religion as well as the effects of history, in particular the Japanese occupation.