Recently there have been increasing reports on behavior problems in young children, including the phenomenon of “small bullies” in kindergartens. This is aggravated by parents over-protecting their children, which in term reinforced the self-centredness of their children. After implementing education reform for ten years, Hong Kong has improved the teacher to student ratio in its kindergarten classrooms to facilitate small class teaching. The present research analyses the situation where small class teaching could enhance affective and moral development of young children. The paper cites a school case study to illustrate the effect of teaching in the small class teaching environment in a school which has adopted the Neo-Confucian ideology as its teaching philosophy. Ways to tackle the difficulties encountered in implementation of moral education in small class settings will be discussed.