Innovative learning techniques are needed, to match the expectations of the current audience to improve business ethics education for the twenty-first century. One of the innovative technologies which is believed to have a big effect on a bachelor's degree is augmented reality (AR). Incorporating AR into the modern education system is expected to produce optimal augmentation in the learning and teaching environment. This will have a large impact on increasing students' moral imagination. This study examines the use of AR-based behavior simulation, as an innovative technique for learning ethics, to improve moral imagination. This study employs a 3 x 2 experiment method, three training modes (AR-based behavioral simulation, paper-based-behavioral simulation, and no training) and two times (time one and time two) between- and within-subject factorial design. The subjects are 147 students on a business ethics course. The result of this study reveals that the use of AR-based behavior simulation can improve moral imagination.