This paper is about the use of literary work for character education. It focuses on the following question: How can "Laxdaela Saga" be used as a vehicle of character education for teenagers? The answer is partially based on a review of literature from a neo-Aristotelian framework and Kantian conception of morality and partially on qualitative and quantitative data collected in three schools where "Laxdaela Saga" was taught for six weeks. The participating teachers found that an emphasis on moral issues was not a digression but supported them in teaching the story and helped the students understand it.