To make education a profitable enterprise and contributor to social development requires that schools infuse values into schooling as part of the ethical construction of learners and citizenship building. This research used Kampala district as the case study to conduct a qualitative inquiry with grounded theory to examine the integration of values into the management of learners’ discipline in Ugandan schools. Using a sample of 60 participants, the researcher gathered data using personal interviews, focus group interviews, and documentary analysis. Through the analysis of this data, the researcher established that the School Governing Body (SGB), government, educators, missionaries and the community are stakeholders highly involved in directing the process of values integration into learners’ discipline. He also discerned that different schools impart moral, spiritual, academic, aesthetic, social and universal values into the learners. However with the 1963 Castle Report on Education that led to the nationalization and secularization of schools, denominational schools strongly felt that government robbed them of their powers to control and manage schools through the “principle of subsidiarity”. This seems to have led to the gradual erosion of values and breakdown of discipline in the denominational schools as well as the others. The central argument of this thesis is that integrating values into school discipline in Uganda would result into an inclusive education system that supports both theist and atheist attitudes towards formal schooling. Some respondents argued that values should be directly integrated into learners’ discipline while others opposed values integration. Those who supported values integration into school discipline pointed out that it is an integral part of life-education. On the other hand, those who oppose integrating values argued that values integration might be misused to impose secular influences on the learners. The existing avenues of optimal integration of values into school discipline include use of physical punishment and restorative justice, although custodial methods are widely condemned by human rights activists for being too harsh, punitive and retaliatory. Restorative justice methods used include the use of religious and social clubs as well as counseling and guidance. Collective stakeholder participation in school management is also widely used where school management, government, parents and the community take on a collaborative role in empowering and creating an environment for positive discipline. Finally, missionary educators play a significant role in learners’ behavioural modification. The challenges of values integration into school discipline, on the other hand, are policy-related; including poor school administrative styles, failure to define which values to emphasize in disciplinary management, lack of staff motivation and educators’ unethical behaviour. The classroom-related challenges were an over emphasis on academic values that, consequently, turn education into a theoretical rather than a practical exercise. This is compounded by the poor teaching methodologies used like rote-learning due to the problem of dealing with large classes especially in UPE and USE schools and the strict emphasis on an examination-centered syllabus. The social-related challenge observed was the negative influence of the media on young people’s life styles, consequently, leading to permissiveness, aggressive, violent and militant behaviours now common in schools. The study underscored the need to emphasise stakeholder responsibility in school disciplinary management, and the necessity to offer visionary and collegial leadership, identify a common set of values critical to the promotion of life-long learning, promotion of life-education to ensure formation of morally upright learners, and encourage inclusive education (UBUNTUISM). Government should draft a national education philosophy to guide schools in integration of values education, emphasizing secular, moral and religious values, as well as the need for restorative justice, and employing more pragmatic teaching methodologies. There is also the need to create role-models and staff motivation. All these are cardinal remedies in ensuring constructive school discipline. Finally, the central theory that explains the integration is an Integrated Values Framework (IVF) for Positive Discipline (PD). It advocates that discipline is a process of nurturing learners through the provision of inclusive education, life-long learning and citizenship building.