Moral stories are a means of communicating the consequences of our actions and emphasizing virtuous behaviour, such as honesty. However, the effect of these stories on children's lie‐telling has yet to be thoroughly explored. The current study investigated the influence of moral stories on children's willingness to lie for another individual. Children were read one of three stories prior to being questioned about an accidental wrongdoing: (1) a positive story, which emphasized the benefits of being honest; (2) a negative story, which outlined the potential costs of lying; and (3) a neutral story, which was unrelated to truth‐telling or lie‐telling. Initially, most children withheld information about the event. Older children were better able to maintain their lies throughout the interview. However, when asked direct questions, children in the positive story condition were more likely to tell the truth than those in the negative and neutral conditions. No significant differences were found between the negative and neutral story conditions. The present study also investigated the relationship between children's conceptual understanding and behaviour. The findings revealed that children's knowledge of truths and lies increased with age. Children who lied had significantly higher conceptual scores than those who did not lie. Furthermore, the type of story children were read had a significant impact on their evaluations of true and false statements. Copyright © 2015 John Wiley & Sons, Ltd.