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Maintaining order and discipline is one of the most challenging aspects of the school-based administrator’s role. School officials make disciplinary decisions within a context that is established, in part, by case law, legislation and regulations, school board policies and social, organizational and individual values. The exercise of administrative discretion is vital to the decision-making process. It offers school leaders creativity and flexibility. The interpretation and implementation of school discipline policies by in-school administrators can provide insight into their discretionary decision-making. The purpose of this study was to determine how principals in an urban school division in Western Canada negotiated within the legal parameters of discretion as it is delegated to them in legislation and school board policy in order to be faithful to their own values system in matters of student discipline. The study assumed Christopher Hodgkinson’s hierarchy of values as a theoretical framework for examining the administrators’ decision-making, and used H.L.A. Hart’s concept of law as a system of rules as an additional lens through which to view the exercise of administrative discretion. Employing an interpretive qualitative research methodology, the researcher conducted in-depth, semi-structured interviews with ten elementary school principals. Findings of the research reflect that the way principals perceived the exercise of discretion enabled them to maintain school safety, to be, in their judgment, fair and just in decision-making in disciplinary situations, to balance competing rights in the school setting and to make decisions in what they understood to be the best interests of their students. The principals’ exercise of discretion, however, appeared to be subject to various values and influences which could lead to injustice and arbitrariness in decision-making. In the end, I concluded discretionary power should be structured, limited and subject to review in order to provide accountability to stakeholders. Implications of the study suggest principals should develop greater awareness of their own values system and be reflective about their judgments and decision-making. Schools should have clearly-defined codes of conduct, and school divisions should outline expectations for discipline policy implementation and adherence by principals.