As some formal bioethics instruction has become the norm in American medical schools, a trend has emerged toward increased attention to context in both bioethics education and bioethical decision-making. A focus on classical dilemmas and a textbook knowledge of principles is yielding its previous dominance to permit a more detailed examination of ethical behaviour in actual practice in medicine. After documenting and analysing this emerging trend in bioethics education and its parallel in bioethics theory and research, we turn to the context of medical education itself to look beyond formal bioethics instruction to the 'informal curriculum' that is so central to the moral development of medical students and residents. A qualitative research strategy is being used to study the informal curriculum through analysing tape-recorded informal conversations students and residents have with their friends and colleagues at work about issues bearing on their professional development. Data presented are documenting 'the unwritten code' for medical students on a surgical clerkship and the senior residents' informal ways of producing a 'practical ethics of conduct' that shapes understanding of what is good, skilful, and right on that surgical service. How conceptions of appropriate conduct are conveyed, rewarded and sanctioned also reveals how professional demeanour is taught, permitting discussion about what should be retained and what changed. The context in which ethical issues arise enhances understanding of ethical practice in medicine.