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Little research exists that examines the exercise of discretion by principals in their disciplinary decision making. This study sought to understand the application of values by principals as they engage in student disciplinary decision making within legally fixed parameters of their administrative discretion. This qualitative methodology used semistructured in-depth interviews of 10 urban elementary school principals in western Canada. Data were analyzed through coding into data segments and then by grouping segments into categories, patterns, and themes. The principals appeared to understand discretion as being part of larger, more complex issues or a gray area; the exercise of good judgment; and necessary in order for them to be fair and reasonable in their disciplinary decision making. Influences upon their decision making included pressure from their superiors, the expectations of parents and staff, and the threat of legal action. The principals understood discretion as allowing them to differentiate in order to be fair and to adapt rules for their personal definitions of equity. Discretion delegated to school leaders should be structured through clear and specific discipline plans and policies and limited by restricting the circumstances and context under which it will be considered. Discretionary decisions also should be subject to review by the appropriate stakeholders. Elementary principals should gain a greater understanding of applicable case law in order that their decision making aligns with current jurisprudence. Future directions for research include examining students' perception of fairness of principals' discretionary decision making in disciplinary matters. [ABSTRACT FROM AUTHOR]